MercadoLibre (MELI – Free Report) closed at $2,021.37 in the latest trading session, marking a +1.59% move from the prior day. This change lagged the S&P 500’s 2.13% gain on the day. Meanwhile, the Dow experienced a rise of 1.65%, and the technology-dominated Nasdaq saw an increase of 2.61%.
Prior to today’s trading, shares of the operator of an online marketplace and payments system in Latin America had lost 3.7% over the past month. This has was narrower than the Retail-Wholesale sector’s loss of 13.31% and the S&P 500’s loss of 9.57% in that time.
Analysts and investors alike will be keeping a close eye on the performance of MercadoLibre in its upcoming earnings disclosure. The company’s earnings per share (EPS) are projected to be $7.82, reflecting a 15.34% increase from the same quarter last year. Our most recent consensus estimate is calling for quarterly revenue of $5.5 billion, up 27% from the year-ago period.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $47.50 per share and a revenue of $25.89 billion, representing changes of +26.03% and +24.59%, 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. Therefore, positive revisions in estimates convey analysts’ confidence in the company’s business performance and profit potential.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional 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 8.06% higher. Currently, MercadoLibre is carrying a Zacks Rank of #2 (Buy).
Digging into valuation, MercadoLibre currently has a Forward P/E ratio of 41.89. For comparison, its industry has an average Forward P/E of 20.81, which means MercadoLibre is trading at a premium to the group.
It’s also important to note that MELI currently trades at a PEG ratio of 1.12. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company’s expected earnings growth rate into account. MELI’s industry had an average PEG ratio of 1.07 as of yesterday’s close.
The Internet – Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 54, putting it in the top 22% of all 250+ industries.
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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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