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MercadoLibre (MELI) Increases Yet Falls Behind Market: What Investors Need to Know

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MercadoLibre (MELI - Free Report) closed the most recent trading day at $1,713.87, moving +0.2% from the previous trading session. The stock's performance was behind the S&P 500's daily gain of 0.82%. At the same time, the Dow added 0.41%, and the tech-heavy Nasdaq gained 0.95%.

The operator of an online marketplace and payments system in Latin America's shares have seen an increase of 8.71% over the last month, surpassing the Retail-Wholesale sector's gain of 7.3% and the S&P 500's gain of 5.59%.

The investment community will be closely monitoring the performance of MercadoLibre in its forthcoming earnings report. The company is expected to report EPS of $6.66, up 104.92% from the prior-year quarter. In the meantime, our current consensus estimate forecasts the revenue to be $4.13 billion, indicating a 37.64% growth compared to the corresponding quarter of the prior year.

Investors should also take note of any recent adjustments to analyst estimates for MercadoLibre. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 1.09% higher within the past month. At present, MercadoLibre boasts a Zacks Rank of #2 (Buy).

Investors should also note MercadoLibre's current valuation metrics, including its Forward P/E ratio of 48.67. This denotes a premium relative to the industry's average Forward P/E of 17.77.

Meanwhile, MELI's PEG ratio is currently 1.15. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. As the market closed yesterday, the Internet - Commerce industry was having an average PEG ratio of 0.57.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 76, putting it in the top 31% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.


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