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

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In the latest trading session, MercadoLibre (MELI) closed at $762.78, marking a -0.15% move from the previous day. This move lagged the S&P 500's daily gain of 0.13%. At the same time, the Dow added 0.28%, and the tech-heavy Nasdaq lost 0.04%.

Prior to today's trading, shares of the operator of an online marketplace and payments system in Latin America had gained 3.31% over the past month. This has lagged the Retail-Wholesale sector's gain of 8.19% and the S&P 500's gain of 5.55% in that time.

Wall Street will be looking for positivity from MercadoLibre as it approaches its next earnings report date. The company is expected to report EPS of $1.68, up 22.63% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $2.48 billion, up 45.77% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.28 per share and revenue of $10.3 billion. These totals would mark changes of +276.05% and +45.68%, respectively, from last year.

Any recent changes to analyst estimates for MercadoLibre should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 5.33% lower. MercadoLibre is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, MercadoLibre currently has a Forward P/E ratio of 121.57. For comparison, its industry has an average Forward P/E of 23.94, which means MercadoLibre is trading at a premium to the group.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 97, which puts it in the top 39% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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