MercadoLibre (MELI) closed at $2,361.87 in the latest trading session, marking a -1.22% move from the prior day. This move lagged the S&P 500's daily gain of 0.4%. Elsewhere, the Dow gained 0.47%, while the tech-heavy Nasdaq added 0.24%.
The operator of an online marketplace and payments system in Latin America's shares have seen a decrease of 6.61% over the last month, not keeping up with the Retail-Wholesale sector's gain of 4.05% and the S&P 500's gain of 4.61%.
The investment community will be paying close attention to the earnings performance of MercadoLibre in its upcoming release. In that report, analysts expect MercadoLibre to post earnings of $12.01 per share. This would mark year-over-year growth of 14.6%. In the meantime, our current consensus estimate forecasts the revenue to be $6.52 billion, indicating a 28.57% growth compared to the corresponding quarter of the prior year.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $47.75 per share and revenue of $27.35 billion. These totals would mark changes of +26.69% and +31.66%, respectively, from last year.
It's also important for investors to be aware of any recent modifications to analyst estimates for MercadoLibre. These recent revisions tend to reflect the evolving nature of short-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. MercadoLibre is holding a Zacks Rank of #4 (Sell) right now.
In terms of valuation, MercadoLibre is presently being traded at a Forward P/E ratio of 50.08. Its industry sports an average Forward P/E of 23.01, so one might conclude that MercadoLibre is trading at a premium comparatively.
Investors should also note that MELI has a PEG ratio of 1.42 right now. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Internet - Commerce industry had an average PEG ratio of 1.68 as trading concluded yesterday.
The Internet - Commerce industry is part of the Retail-Wholesale sector. At present, this industry carries a Zacks Industry Rank of 66, placing it within the top 27% of over 250 industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. 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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MercadoLibre, Inc. (MELI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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