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MercadoLibre (MELI) Stock Sinks As Market Gains: What You Should Know

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MercadoLibre (MELI - Free Report) closed the most recent trading day at $1,869.62, moving -0.89% from the previous trading session. This change lagged the S&P 500's 0.15% gain on the day.

Coming into today, shares of the operator of an online marketplace and payments system in Latin America had gained 2.77% in the past month. In that same time, the Retail-Wholesale sector gained 1.29%, while the S&P 500 lost 0.58%.

Wall Street will be looking for positivity from MELI as it approaches its next earnings report date. In that report, analysts expect MELI to post earnings of $1.27 per share. This would mark year-over-year growth of 353.57%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.84 billion, up 64.87% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.74 per share and revenue of $6.99 billion, which would represent changes of +3525% and +75.96%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for MELI. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. MELI is holding a Zacks Rank of #1 (Strong Buy) right now.

Looking at its valuation, MELI is holding a Forward P/E ratio of 688.5. This represents a premium compared to its industry's average Forward P/E of 52.38.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 218, putting it in the bottom 15% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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