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1. Company Snapshot

1.a. Company Description

MercadoLibre, Inc.operates online commerce platforms in Latin America.It operates Mercado Libre Marketplace, an automated online commerce platform that enables businesses, merchants, and individuals to list merchandise and conduct sales and purchases online; and Mercado Pago FinTech platform, a financial technology solution platform, which facilitates transactions on and off its marketplaces by providing a mechanism that allows its users to send and receive payments online, as well as allows users to transfer money through their websites or on the apps.


The company also offers Mercado Fondo that allows users to invest funds deposited in their Mercado Pago accounts; Mercado Credito, which extends loans to certain merchants and consumers; and Mercado Envios logistics solution that enables sellers on its platform to utilize third-party carriers and other logistics service providers, as well as fulfillment and warehousing services for sellers.In addition, it provides Mercado Libre Classifieds, an online classified listing service, where users can list and purchase motor vehicles, real estate, and services; Mercado Libre Ads, an advertising platform, which enables large retailers and brands to promote their products and services on the Internet; and Mercado Shops, an online storefronts solution that enables users to set-up, manage, and promote their own digital stores.MercadoLibre, Inc.


was incorporated in 1999 and is headquartered in Montevideo, Uruguay.

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1.b. Last Insights on MELI

Have nothing to say about that one ...

1.c. Company Highlights

2. MercadoLibre's Strong Q3 Earnings: Growth Momentum Continues

MercadoLibre reported robust Q3 earnings, with revenues growing 39% year-over-year, marking the 27th consecutive quarter of growth above 30%. Operating income reached $724 million, up 30% year-over-year, demonstrating the company's ability to balance growth investments and profitability. Earnings per share (EPS) came in at $8.32, slightly below estimates of $9.12. The strong top-line growth was driven by investments across the ecosystem, including e-commerce and fintech. As Martin de Los Santos noted, "Our consistent top-line growth comes from the investments we've made across our ecosystem."

Publication Date: Oct -31

📋 Highlights
  • Revenue Growth:: 39% YoY revenue increase, marking the 27th consecutive quarter above 30% growth.
  • Active Buyers:: 75 million active buyers, adding 4 million new buyers in the quarter.
  • Shipping Efficiency:: 8% QoQ reduction in unit shipping costs in Brazil due to scale and unused capacity utilization.
  • Credit Card Profitability:: 50% of Brazil's credit card volume and TPV already profitable; Argentina's credit card launch shows early promise.
  • Argentina Performance:: 97% revenue growth in local currency YoY, despite macroeconomic challenges, with a new fulfillment center and credit card launch.

Segment Performance

The company's e-commerce platform saw significant growth, with total unique buyers reaching 75 million active buyers, up 4 million new buyers. The fintech segment also performed well, with the credit card launch in Argentina showing promising results. The company's strategic investments in free shipping, logistics, and credit card continued to deliver strong top-line growth.

Valuation and Growth Expectations

With a P/E Ratio of 47.74 and an EV/EBITDA of 31.65, the market appears to be pricing in significant growth expectations. Analysts estimate next year's revenue growth at 27.2%, which is slightly lower than this year's growth rate. The company's strong track record of growth and its leadership position in the e-commerce market in Brazil and Argentina support its long-term prospects. The ROE of 47.11% and ROIC of 22.14% indicate a strong ability to generate returns on equity and invested capital.

Operational Highlights

The company continued to invest in its logistics and fulfillment capabilities, with a 28% quarter-over-quarter increase in volume in Brazil. The deployment of robotics and technology in warehouses is expected to drive productivity gains. The credit card business is also showing promising results, with cohorts from last year approaching breakeven and those older than 2 years being profitable.

Outlook

MercadoLibre's strong Q3 earnings demonstrate its ability to drive growth across its ecosystem. The company's continued investments in e-commerce and fintech are expected to drive long-term value creation. While the near-term margin trajectory may be impacted by growth investments, the company's strong track record of growth and its leadership position in the market support its long-term prospects.

3. NewsRoom

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Mercado Libre Successfully Issues USD 750 million of 2033 Senior Unsecured Notes

Dec -04

Source: businesswire.com

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MercadoLibre, Inc. (NASDAQ:MELI) Receives Average Rating of “Moderate Buy” from Analysts

Dec -04

Source: defenseworld.net

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Black Swift Group Loads Up on MercadoLibre Stock With 3,400 Shares

Dec -03

Source: fool.com

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Up 7,400% All Time, Is It Too Late to Buy MercadoLibre Stock?

Dec -03

Source: fool.com

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EXPE or MELI: Which Is the Better Value Stock Right Now?

Dec -02

Source: zacks.com

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3 Top Stocks to Buy in December

Dec -02

Source: fool.com

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This Latin American E-Commerce Stock Could Be Worth $500 Billion in 10 Years

Dec -01

Source: fool.com

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5 Amazing Growth Stocks to Buy Before 2026

Nov -30

Source: fool.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (24.40%)

6. Segments

Internet Software & Services

Expected Growth: 24.4%

MercadoLibre's dominance in Latin America's growing e-commerce market, driven by increasing internet penetration, mobile adoption, and a growing middle class, will fuel its online marketplace services growth.

7. Detailed Products

Mercado Pago

An online payment system that allows users to send and receive payments securely

Mercado Libre Marketplace

An e-commerce platform that allows individuals and businesses to buy and sell goods

Mercado Envios

A logistics and shipping service that allows sellers to send packages to buyers

Mercado Ads

A digital advertising platform that allows businesses to promote their products and services

Mercado Shops

An e-commerce platform that allows businesses to create their own online stores

Mercado Crédito

A financial services platform that provides credit and financing options to buyers and sellers

8. MercadoLibre, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

MercadoLibre's business model is based on providing a platform for buyers and sellers to interact, which makes it difficult for substitutes to emerge. However, the rise of social media and other online platforms could potentially threaten MercadoLibre's market share.

Bargaining Power Of Customers

MercadoLibre's customers have low bargaining power due to the company's dominant position in the Latin American e-commerce market. Additionally, the company's platform provides a wide range of products and services, making it difficult for customers to switch to alternative platforms.

Bargaining Power Of Suppliers

MercadoLibre's suppliers, including sellers and logistics providers, have some bargaining power due to the company's reliance on them to provide products and services. However, the company's scale and market position give it some negotiating power to maintain favorable terms.

Threat Of New Entrants

The threat of new entrants is low due to the significant barriers to entry in the Latin American e-commerce market, including the need for significant investments in technology, logistics, and marketing. Additionally, MercadoLibre's established brand and market position make it difficult for new entrants to gain traction.

Intensity Of Rivalry

The intensity of rivalry in the Latin American e-commerce market is high, with several players competing for market share. However, MercadoLibre's dominant position and strong brand give it a competitive advantage, allowing it to maintain its market share despite intense competition.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 64.81%
Debt Cost 8.13%
Equity Weight 35.19%
Equity Cost 12.04%
WACC 9.50%
Leverage 184.21%

11. Quality Control: MercadoLibre, Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
PDD

A-Score: 6.2/10

Value: 3.5

Growth: 9.8

Quality: 8.8

Yield: 0.0

Momentum: 6.0

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
AutoZone

A-Score: 5.9/10

Value: 3.7

Growth: 7.2

Quality: 6.1

Yield: 0.0

Momentum: 9.0

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
O'Reilly Automotive

A-Score: 5.8/10

Value: 2.9

Growth: 7.4

Quality: 6.0

Yield: 0.0

Momentum: 8.5

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
eBay

A-Score: 5.5/10

Value: 3.3

Growth: 6.1

Quality: 6.9

Yield: 3.0

Momentum: 8.0

Volatility: 5.7

1-Year Total Return ->

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Stock-Card
MercadoLibre

A-Score: 5.4/10

Value: 1.3

Growth: 8.7

Quality: 7.4

Yield: 0.0

Momentum: 7.0

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
Tractor Supply

A-Score: 5.0/10

Value: 2.4

Growth: 7.3

Quality: 5.4

Yield: 3.0

Momentum: 3.5

Volatility: 8.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

2066.42$

Current Price

2066.42$

Potential

-0.00%

Expected Cash-Flows