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MercadoLibre (MELI) Gains But Lags Market: What You Should Know

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MercadoLibre (MELI) closed the most recent trading day at $1,554.04, moving +0.35% from the previous trading session. This move lagged the S&P 500's daily gain of 0.83%.

Coming into today, shares of the operator of an online marketplace and payments system in Latin America had lost 18.76% in the past month. In that same time, the Retail-Wholesale sector lost 6.88%, while the S&P 500 lost 3.68%.

MELI will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.27, up 353.57% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.84 billion, up 64.87% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.74 per share and revenue of $6.99 billion, which would represent changes of +3525% and +75.96%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for MELI. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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 has moved 0.43% lower within the past month. MELI is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that MELI has a Forward P/E ratio of 565.17 right now. This represents a premium compared to its industry's average Forward P/E of 51.44.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 204, which puts it in the bottom 20% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

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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