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MercadoLibre (MELI) Gains As Market Dips: What You Should Know

MercadoLibre (MELI) closed at $1,512.51 in the latest trading session, marking a +0.27% move from the prior day. The stock outpaced the S&P 500's daily loss of 0.75%.

Heading into today, shares of the operator of an online marketplace and payments system in Latin America had gained 3.14% over the past month, outpacing the Retail-Wholesale sector's gain of 1.15% and the S&P 500's gain of 2.74% in that time.

Wall Street will be looking for positivity from MELI as it approaches its next earnings report date. On that day, MELI is projected to report earnings of -$0.10 per share, which would represent a year-over-year decline of 109.01%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.46 billion, up 66.59% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of -$1 per share and revenue of $6.35 billion. These totals would mark changes of -1150% and +59.92%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for MELI. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. MELI currently has a Zacks Rank of #5 (Strong Sell).

In terms of valuation, MELI is currently trading at a Forward P/E ratio of 5692.38. Its industry sports an average Forward P/E of 61.22, so we one might conclude that MELI is trading at a premium comparatively.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 209, which puts it in the bottom 18% 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.

To follow MELI in the coming trading sessions, be sure to utilize Zacks.com.


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