Back to top

Image: Bigstock

MercadoLibre (MELI) Exceeds Market Returns: Some Facts to Consider

Read MoreHide Full Article

MercadoLibre (MELI - Free Report) ended the recent trading session at $2,501.31, demonstrating a +1.33% change from the preceding day's closing price. The stock outpaced the S&P 500's daily gain of 0.26%. Meanwhile, the Dow experienced a rise of 0.15%, and the technology-dominated Nasdaq saw an increase of 0.48%.

Heading into today, shares of the operator of an online marketplace and payments system in Latin America had lost 0.18% over the past month, lagging the Retail-Wholesale sector's gain of 0.76% and the S&P 500's gain of 2.87%.

The investment community will be paying close attention to the earnings performance of MercadoLibre in its upcoming release. The company is expected to report EPS of $9.88, up 26.18% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $7.17 billion, up 35.05% from the year-ago period.

For the full year, the Zacks Consensus Estimates project earnings of $44.43 per share and a revenue of $27.78 billion, demonstrating changes of +17.88% and +33.72%, respectively, from the preceding year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for MercadoLibre. Such recent modifications usually signify the changing landscape of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, there's been no change in the Zacks Consensus EPS estimate. Right now, MercadoLibre possesses a Zacks Rank of #4 (Sell).

Investors should also note MercadoLibre's current valuation metrics, including its Forward P/E ratio of 55.56. This signifies a premium in comparison to the average Forward P/E of 22.36 for its industry.

Meanwhile, MELI's PEG ratio is currently 1.61. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Internet - Commerce was holding an average PEG ratio of 1.47 at yesterday's closing price.

The Internet - Commerce industry is part of the Retail-Wholesale sector. With its current Zacks Industry Rank of 71, this industry ranks in the top 29% of all industries, numbering over 250.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


MercadoLibre, Inc. (MELI) - free report >>

Published in