MELI - MercadoLibre expected to post over 26% jump in revenue for Q2

2023-08-01 14:40:44 ET

MercadoLibre ( NASDAQ: MELI ) is set to announce  second-quarter earnings results on Wednesday after market close.

Wall Street analysts expect MercadoLibre to post earnings per share (EPS) of $4.10, while revenue is expected to be $3.27 billion, representing a jump of nearly 26.3%.

The Latin American e-commerce giant, which is present in 18 countries including Argentina, Brazil, Mexico, Chile and Peru, in May posted Q1 profit that beat expectations, helped by a more than 40% rise in Gross Merchandise Volume (GMV).

Total payment volume in the fintech business also grew at 96% on a currency neutral basis, touching $37B.

The company benefitted from the surge in online shopping during the pandemic. However, like any other e-commerce firm, it faced pressure from rising inflation squeezing customer spending capacity.

Along with the company’s GMV, investors will also scrutinize if the growth in its fintech arm will sustain.

Hedgeye analyst Brian McGough said that MELI is also likely to benefit from the bankruptcy of Brazilian e-commerce competitor Americana.

However, BofA Global Research analysts led by Robert E. Ford Aguilar said a new cross-border tax rule in Brazil will hurt results.

While Seeking Alpha analysts and Wall Street rated the stock a “buy”, Seeking Alpha’s Quant Ratings consider the stock a “hold” with a score of 3.12. The stock has gained nearly 47% so far this year.

Over the last 3 months, EPS estimates have been three upward revisions, compared to two downward revisions, while revenue estimates have seen eight upward revisions versus no downward moves.

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