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MercadoLibre (MELI) Registers a Bigger Fall Than the Market: Important Facts to Note

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MercadoLibre (MELI - Free Report) ended the recent trading session at $1,824.96, demonstrating a -1.61% change from the preceding day's closing price. The stock's change was less than the S&P 500's daily loss of 1.21%. Meanwhile, the Dow experienced a rise of 0.02%, and the technology-dominated Nasdaq saw a decrease of 2.6%.

Heading into today, shares of the operator of an online marketplace and payments system in Latin America had gained 3.09% over the past month, outpacing the Retail-Wholesale sector's gain of 3.07% and the S&P 500's loss of 0.03%.

The investment community will be paying close attention to the earnings performance of MercadoLibre in its upcoming release. The company's upcoming EPS is projected at $9.41, signifying a 13.10% increase compared to the same quarter of the previous year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $10.66 billion, up 43.82% from the year-ago period.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $38.09 per share and a revenue of $41.74 billion, representing changes of -3.32% and +44.45%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for MercadoLibre. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

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, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 2.62% lower. At present, MercadoLibre boasts a Zacks Rank of #4 (Sell).

From a valuation perspective, MercadoLibre is currently exchanging hands at a Forward P/E ratio of 48.7. This indicates a premium in contrast to its industry's Forward P/E of 15.42.

Meanwhile, MELI's PEG ratio is currently 1.3. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Internet - Commerce was holding an average PEG ratio of 1.25 at yesterday's closing price.

The Internet - Commerce industry is part of the Retail-Wholesale sector. With its current Zacks Industry Rank of 160, this industry ranks in the bottom 35% of all industries, numbering over 250.

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

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.

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