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MercadoLibre (MELI) Stock Sinks As Market Gains: Here's Why

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The most recent trading session ended with MercadoLibre (MELI - Free Report) standing at $2,079.96, reflecting a -0.54% shift from the previouse trading day's closing. This change lagged the S&P 500's 0.77% gain on the day. Elsewhere, the Dow saw an upswing of 0.47%, while the tech-heavy Nasdaq appreciated by 0.87%.

The the stock of operator of an online marketplace and payments system in Latin America has fallen by 1.47% in the past month, lagging the Retail-Wholesale sector's gain of 5.56% and the S&P 500's gain of 4.87%.

The upcoming earnings release of MercadoLibre will be of great interest to investors. It is anticipated that the company will report an EPS of $11.27, marking a 57.4% rise compared to the same quarter of the previous year. Our most recent consensus estimate is calling for quarterly revenue of $5.25 billion, up 39.52% from the year-ago period.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $37.55 per share and a revenue of $20.51 billion, representing changes of +92.96% and +41.74%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for MercadoLibre. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 4.01% increase. Right now, MercadoLibre possesses a Zacks Rank of #3 (Hold).

Digging into valuation, MercadoLibre currently has a Forward P/E ratio of 55.68. For comparison, its industry has an average Forward P/E of 22.87, which means MercadoLibre is trading at a premium to the group.

We can additionally observe that MELI currently boasts a PEG ratio of 1.28. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Internet - Commerce industry had an average PEG ratio of 0.82 as trading concluded yesterday.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 55, putting it in the top 22% of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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