MELI - MercadoLibre Is Accelerating Its Cash Generation
2024-02-18 10:00:35 ET
Summary
- MercadoLibre is a core holding in my portfolio with a 6% weighting.
- The shares have experienced significant growth since June 2022, but is still below its all-time high. Analysts expect strong growth in the next quarter.
- The credit business at MercadoLibre has improved over time, with declining past-due metrics and a high net interest margin after losses. GMV and TPV have also seen significant growth.
- Profitability has been increasing fast, and the balance sheet has improved to a net cash position.
- MercadoLibre stock is a buy based on its potential future Owner Earnings generation.
MercadoLibre ( MELI ) is a core holding in my portfolio at over 6%. In October, I published my last update on the stock . In this article, I talked about a few main KPIs I watch for MELI going into the earnings report, estimated for the 22nd February :
- Credit business development
- Gross Merchandise Volume (GMV)
- Total Payment Volume (TPV) and TPV OFF (TPV outside the MercadoLibre ecosystem)
- Take rates for eCommerce and Fintech business segments