MercadoLibre (NASDAQ:MELI – Get Free Report) posted its quarterly earnings data on Wednesday. The company reported $8.83 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $9.27 by ($0.44), FiscalAI reports. MercadoLibre had a return on equity of 26.54% and a net margin of 5.30%. The firm had revenue of $10.75 billion for the quarter, compared to analysts’ expectations of $10.69 billion. During the same period in the prior year, the firm earned $8.32 earnings per share. MercadoLibre’s revenue was up 45.1% compared to the same quarter last year.
Here are the key takeaways from MercadoLibre’s conference call:
- Growth remained broad-based: net revenue and financial income rose 41% year over year on an FX-neutral basis, while Brazil commerce GMV grew 36% and items per buyer increased 16%.
- Operating margin declined: operating income was $676 million, with a 6.3% margin, down 40 basis points sequentially as higher shipping costs and affiliate marketing investment weighed on results. Management expects some capacity-related pressure to ease in Q4, but energy costs remain a headwind and affiliate investment will continue.
- Fintech growth continued alongside stable credit metrics: monthly active users rose 29%, assets under management 67% and the credit portfolio 62%; NPLs were stable overall, with management saying it is cautiously limiting exposure to riskier borrower segments.
- Management cited improving operating efficiency: Brazil cost per shipment fell 5% year over year and 14% from before the free-shipping threshold change, and some free shipments became variable-contribution positive in September. Executives said the expanded logistics capacity and greater scale are intended to support future growth and improve unit economics over time.
MercadoLibre Stock Performance
Shares of NASDAQ:MELI traded up $77.72 during trading on Wednesday, hitting $1,739.88. 823,959 shares of the company were exchanged, compared to its average volume of 535,833. The stock has a 50 day moving average of $1,824.83 and a 200 day moving average of $1,809.90. The company has a market cap of $88.21 billion, a PE ratio of 45.20, a P/E/G ratio of 1.17 and a beta of 1.42. The company has a debt-to-equity ratio of 0.53, a current ratio of 1.12 and a quick ratio of 1.10. MercadoLibre has a 52-week low of $1,495.00 and a 52-week high of $2,342.00.
Key MercadoLibre News
Here are the key news stories impacting MercadoLibre this week:
- Positive Sentiment: Revenue and financial income rose 45% year over year to $10.75 billion, topping analyst expectations; Brazil was the strongest-growth market. Q3 results
- Negative Sentiment: EPS of $8.83 missed analyst estimates. Operating income was $676 million, with a 6.3% margin that eased sequentially as MercadoLibre invested in fulfillment capacity and absorbed higher logistics costs. Reuters report
- Negative Sentiment: Spending on shipping, marketing and credit contributed to further margin pressure. Currency-neutral revenue growth also slowed for a fourth consecutive quarter, raising concerns that rapid sales growth may not translate into profit growth as quickly as investors had hoped. Earnings reaction
Wall Street Analysts Forecast Growth
A number of research analysts recently weighed in on MELI shares. Susquehanna raised their price target on shares of MercadoLibre to $2,400.00 and gave the company a “positive” rating in a research report on Tuesday, October 6th. Citigroup upgraded shares of MercadoLibre from a “neutral” rating to a “buy” rating and cut their price target for the stock from $2,100.00 to $2,050.00 in a report on Tuesday, October 27th. JPMorgan Chase & Co. upped their price objective on shares of MercadoLibre from $1,900.00 to $2,150.00 and gave the stock a “neutral” rating in a research report on Tuesday, August 11th. New Street Research began coverage on shares of MercadoLibre in a research note on Wednesday, September 23rd. They issued a “buy” rating and a $2,450.00 price objective for the company. Finally, Cantor Fitzgerald decreased their price objective on shares of MercadoLibre from $2,300.00 to $2,200.00 and set an “overweight” rating for the company in a research note on Monday, October 12th. Thirteen research analysts have rated the stock with a Buy rating and five have given a Hold rating to the company’s stock. Based on data from MarketBeat.com, MercadoLibre currently has a consensus rating of “Moderate Buy” and a consensus price target of $2,248.75.
Get Our Latest Stock Report on MELI
MercadoLibre Company Profile
MercadoLibre, Inc is a technology company that operates an online commerce and financial services ecosystem across Latin America. Founded in 1999 by Marcos Galperin, the company initially developed an online marketplace and has expanded into a broad platform connecting buyers and sellers with businesses and consumers.
Its commerce operations include the MercadoLibre marketplace, where users can purchase and sell products across numerous categories. The company also offers supporting services such as Mercado Envíos for shipping and logistics, Mercado Ads for digital advertising, and tools for merchants to manage their online businesses.
MercadoLibre’s financial technology business is centered on Mercado Pago, which provides digital payment processing, online checkout, money transfer and account services.
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