MELI - Why MercadoLibre Stock Shot Higher This Week
2023-11-03 08:24:01 ET
Shares of MercadoLibre (NASDAQ: MELI) shot up as much as 16% this week, according to data from S&P Global Market Intelligence . The e-commerce operator with a major presence in Brazil, Mexico, and other Latin American countries posted strong growth and operating leverage in its third-quarter earnings report. After this week's rise, MercadoLibre stock is now up 55% over the past year and off 33.5% from all-time highs.
It was hard to find anything negative about MercadoLibre's Q3 earnings. The top of its business funnel looked great, with active users up to 120 million compared to 88 million a year prior. Gross merchandise volume on its e-commerce platform hit $11.36 billion, up from $8.6 billion in 2022. Its total payments business is much larger than this due to the huge success of its MercadoPago consumer application, which has tens of millions of users across the Latin America region. Total payment volume hit $47.2 billion just in the third quarter, up 47% year over year.
This all led to MercadoLibre's net revenue reaching $3.76 billion in Q3. With high fixed costs, MercadoLibre's increasing scale has led to strong operating leverage, which was evident in the third quarter. Operating income hit $685 million in the quarter, or an 18% margin, up from 11% in 2022.
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Why MercadoLibre Stock Shot Higher This Week