We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
MercadoLibre, Inc. (MELI) Hit a 52 Week High, Can the Run Continue?
Read MoreHide Full Article
Shares of MercadoLibre (MELI - Free Report) have been strong performers lately, with the stock up 5.2% over the past month. The stock hit a new 52-week high of $1365.64 in the previous session. MercadoLibre has gained 58.3% since the start of the year compared to the 9.1% move for the Zacks Retail-Wholesale sector and the 20.5% return for the Zacks Internet - Commerce industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on May 3, 2023, MercadoLibre reported EPS of $3.97 versus consensus estimate of $3.04 while it beat the consensus revenue estimate by 5.53%.
For the current fiscal year, MercadoLibre is expected to post earnings of $16.90 per share on $13.54 billion in revenues. This represents a 77.33% change in EPS on a 28.47% change in revenues. For the next fiscal year, the company is expected to earn $27.06 per share on $16.71 billion in revenues. This represents a year-over-year change of 60.11% and 23.42%, respectively.
Valuation Metrics
MercadoLibre may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
MercadoLibre has a Value Score of C. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 79.3X current fiscal year EPS estimates, which is a premium to the peer industry average of 23.1X. On a trailing cash flow basis, the stock currently trades at 76.1X versus its peer group's average of 13X. Additionally, the stock has a PEG ratio of 1.68. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, MercadoLibre currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if MercadoLibre meets the list of requirements. Thus, it seems as though MercadoLibre shares could have a bit more room to run in the near term.
How Does MELI Stack Up to the Competition?
Shares of MELI have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Booking Holdings Inc. (BKNG - Free Report) . BKNG has a Zacks Rank of # 1 (Strong Buy) and a Value Score of D, a Growth Score of A, and a Momentum Score of C.
Earnings were strong last quarter. Booking Holdings Inc. beat our consensus estimate by 10.69%, and for the current fiscal year, BKNG is expected to post earnings of $136.24 per share on revenue of $20.49 billion.
Shares of Booking Holdings Inc. have gained 0.6% over the past month, and currently trade at a forward P/E of 19.79X and a P/CF of 23.5X.
The Internet - Commerce industry is in the top 33% of all the industries we have in our universe, so it looks like there are some nice tailwinds for MELI and BKNG, even beyond their own solid fundamental situation.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
MercadoLibre, Inc. (MELI) Hit a 52 Week High, Can the Run Continue?
Shares of MercadoLibre (MELI - Free Report) have been strong performers lately, with the stock up 5.2% over the past month. The stock hit a new 52-week high of $1365.64 in the previous session. MercadoLibre has gained 58.3% since the start of the year compared to the 9.1% move for the Zacks Retail-Wholesale sector and the 20.5% return for the Zacks Internet - Commerce industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on May 3, 2023, MercadoLibre reported EPS of $3.97 versus consensus estimate of $3.04 while it beat the consensus revenue estimate by 5.53%.
For the current fiscal year, MercadoLibre is expected to post earnings of $16.90 per share on $13.54 billion in revenues. This represents a 77.33% change in EPS on a 28.47% change in revenues. For the next fiscal year, the company is expected to earn $27.06 per share on $16.71 billion in revenues. This represents a year-over-year change of 60.11% and 23.42%, respectively.
Valuation Metrics
MercadoLibre may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
MercadoLibre has a Value Score of C. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 79.3X current fiscal year EPS estimates, which is a premium to the peer industry average of 23.1X. On a trailing cash flow basis, the stock currently trades at 76.1X versus its peer group's average of 13X. Additionally, the stock has a PEG ratio of 1.68. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, MercadoLibre currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if MercadoLibre meets the list of requirements. Thus, it seems as though MercadoLibre shares could have a bit more room to run in the near term.
How Does MELI Stack Up to the Competition?
Shares of MELI have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Booking Holdings Inc. (BKNG - Free Report) . BKNG has a Zacks Rank of # 1 (Strong Buy) and a Value Score of D, a Growth Score of A, and a Momentum Score of C.
Earnings were strong last quarter. Booking Holdings Inc. beat our consensus estimate by 10.69%, and for the current fiscal year, BKNG is expected to post earnings of $136.24 per share on revenue of $20.49 billion.
Shares of Booking Holdings Inc. have gained 0.6% over the past month, and currently trade at a forward P/E of 19.79X and a P/CF of 23.5X.
The Internet - Commerce industry is in the top 33% of all the industries we have in our universe, so it looks like there are some nice tailwinds for MELI and BKNG, even beyond their own solid fundamental situation.