MELI - MercadoLibre: A Latin American E-Commerce Giant With Potential Upside
2024-04-11 11:47:08 ET
Summary
- MercadoLibre is a dominant e-commerce marketplace and payment platform in Latin America.
- The company's digital advertising business is rapidly growing and taking market share in the region.
- The stock has pulled back, making it an attractive buy opportunity.
MercadoLibre (NASDAQ: MELI ) is a Latin American company that is one of the world's largest e-commerce and fintech companies. The best part is that it still has additional revenue growth opportunities beyond e-commerce and fintech with its growing digital advertising business in the region. Management's excellent governance of its growth and profitability opportunities has made the stock one of the better market performers over the previous ten years, substantially beating the S&P 500 returns.
The company reported fourth-quarter 2023 earnings on February 22, 2024. Although top-line growth was satisfactory, as the company beat analysts' consensus revenue estimates by $130 million, investors were worried about several items, including shrinking margins and missing analysts' GAAP earnings-per-share ("EPS") estimates by $3.71. The stock dropped 10% the day after the earnings report and is still down around 18% from its February 22 closing price as of April 8, 2024. Although the market may still overvalue the stock based on many valuation ratios, its intrinsic value may warrant growth investors putting it on their list of potential stocks to buy. If you are an investor with a long-term mindset willing to withstand short-term volatility, the stock's pullback may be an ideal time to invest. ...
MercadoLibre: A Latin American E-Commerce Giant With Potential Upside