MercadoLibre (MELI) closed at $1,819.74 in the latest trading session, marking a +1.02% move from the prior day. The stock outpaced the S&P 500’s daily gain of 0.02%. On the other hand, the Dow registered a gain of 0.51%, and the technology-centric Nasdaq decreased by 0.18%.
The operator of an online marketplace and payments system in Latin America’s stock has climbed by 7.54% in the past month, exceeding the Retail-Wholesale sector’s loss of 1.33% and the S&P 500’s gain of 0.77%.
The upcoming earnings release of MercadoLibre will be of great interest to investors. The company is expected to report EPS of $8.69, down 15.71% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $9.77 billion, up 43.9% from the prior-year quarter.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $41 per share and revenue of $40.36 billion. These totals would mark changes of +4.06% and +39.68%, respectively, from last year.
Investors should also note any 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 suggests that these changes in estimates have a direct relationship with upcoming stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
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. Within the past 30 days, our consensus EPS projection has moved 0.07% higher. Currently, MercadoLibre is carrying a Zacks Rank of #2 (Buy).
Looking at valuation, MercadoLibre is presently trading at a Forward P/E ratio of 43.94. This expresses a premium compared to the average Forward P/E of 16.29 of its industry.
Also, we should mention that MELI has a PEG ratio of 1.11. 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 1.11 at yesterday’s closing price.
The Internet – Commerce industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 155, finds itself in the bottom 37% echelons of all 250+ industries.
