MercadoLibre (NASDAQ:MELI) Posts Quarterly Earnings Results

by · The Markets Daily

MercadoLibre (NASDAQ:MELI – Get Free Report) issued its earnings results on Wednesday. The company reported $8.83 earnings per share for the quarter, missing the consensus estimate of $9.27 by ($0.44), FiscalAI reports. MercadoLibre had a return on equity of 25.93% and a net margin of 4.91%. The firm had revenue of $10.75 billion during the quarter, compared to analysts’ expectations of $10.69 billion. During the same quarter in the prior year, the company posted $8.32 earnings per share. MercadoLibre’s quarterly revenue was up 45.1% compared to the same quarter last year.

Here are the key takeaways from MercadoLibre’s conference call:

  • Growth remained broad-based: net revenue and financial income rose 41% year over year on an FX-neutral basis, while Brazil commerce GMV grew 36% and items per buyer increased 16%.
  • Operating margin declined: operating income was $676 million, with a 6.3% margin, down 40 basis points sequentially as higher shipping costs and affiliate marketing investment weighed on results. Management expects some capacity-related pressure to ease in Q4, but energy costs remain a headwind and affiliate investment will continue.
  • Fintech growth continued alongside stable credit metrics: monthly active users rose 29%, assets under management 67% and the credit portfolio 62%; NPLs were stable overall, with management saying it is cautiously limiting exposure to riskier borrower segments.
  • Management cited improving operating efficiency: Brazil cost per shipment fell 5% year over year and 14% from before the free-shipping threshold change, and some free shipments became variable-contribution positive in September. Executives said the expanded logistics capacity and greater scale are intended to support future growth and improve unit economics over time.

MercadoLibre Stock Down 1.2%

MercadoLibre stock traded down $19.06 during mid-day trading on Friday, reaching $1,511.22. 755,122 shares of the company were exchanged, compared to its average volume of 552,541. The company has a debt-to-equity ratio of 0.53, a quick ratio of 1.10 and a current ratio of 1.12. The firm has a market cap of $76.61 billion, a P/E ratio of 40.54, a PEG ratio of 1.22 and a beta of 1.42. The business has a fifty day moving average of $1,816.43 and a 200 day moving average of $1,807.18. MercadoLibre has a 12-month low of $1,469.01 and a 12-month high of $2,342.00.

Wall Street Analyst Weigh In

Several brokerages have recently commented on MELI. Susquehanna raised their price target on MercadoLibre to $2,400.00 and gave the company a “positive” rating in a research note on Tuesday, October 6th. Raymond James Financial restated a “strong-buy” rating on shares of MercadoLibre in a report on Thursday. Cantor Fitzgerald lowered their price objective on shares of MercadoLibre from $2,200.00 to $2,000.00 and set an “overweight” rating for the company in a research note on Thursday. Citigroup upgraded shares of MercadoLibre from a “neutral” rating to a “buy” rating and dropped their target price for the stock from $2,100.00 to $2,050.00 in a report on Tuesday, October 27th. Finally, Weiss Ratings reissued a “hold (c)” rating on shares of MercadoLibre in a research report on Tuesday, September 29th. One equities research analyst has rated the stock with a Strong Buy rating, thirteen have issued a Buy rating and five have assigned a Hold rating to the company. According to MarketBeat.com, the company has a consensus rating of “Moderate Buy” and a consensus target price of $2,198.75.

Check Out Our Latest Analysis on MercadoLibre

Key MercadoLibre News

Here are the key news stories impacting MercadoLibre this week:

  • Positive Sentiment: Third-quarter revenue and financial income rose 45.1% year over year to $10.75 billion, topping estimates, with Brazil leading growth. Management is investing in fulfillment, shipping and marketing to strengthen customer loyalty and expects those investments to pay off. Mercado Libre Q3 results
  • Neutral Sentiment: Some analysts remain constructive, though price targets were lowered after results. Scotiabank retained a “sector outperform” rating, while BTIG and Cantor Fitzgerald maintained “buy” or “overweight” ratings with reduced targets. Analyst outlook and Q3 discussion
  • Negative Sentiment: Profitability disappointed: EPS of $8.83 missed the $9.27 consensus, while operating income fell 6% to $676 million and operating margin narrowed to 6.3% from 9.8% a year earlier. Higher fulfillment, free-shipping, marketing and credit-related costs are weighing on earnings; investors are also watching slower FX-neutral growth and regional currency and political risks. Spending and margin pressure

About MercadoLibre

(Get Free Report)

MercadoLibre, Inc operates an online commerce and financial technology platform focused on Latin America. Founded in Argentina in 1999, the company connects buyers and sellers through its marketplace, where businesses and individuals can list and purchase a wide range of products.

The company’s services also include Mercado Pago, which offers digital payment and financial services for transactions on and off its marketplace. MercadoLibre supports commerce with services such as Mercado Envíos, its shipping and logistics platform, and provides advertising tools for merchants and brands.

MercadoLibre serves customers and businesses across numerous Latin American markets, including Brazil, Mexico and Argentina.

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