MercadoLibre (MELI) Registers a Bigger Fall Than the Market: Important Facts to Note

MercadoLibre (MELI) closed at $1,690.26 in the latest trading session, marking a -2.19% move from the prior day. The stock trailed the S&P 500, which registered a daily loss of 1.36%. Elsewhere, the Dow lost 1.64%, while the tech-heavy Nasdaq lost 1.46%.

The operator of an online marketplace and payments system in Latin America's shares have seen a decrease of 12.52% over the last month, not keeping up with the Retail-Wholesale sector's loss of 0.82% and the S&P 500's loss of 1.76%.

The investment community will be paying close attention to the earnings performance of MercadoLibre in its upcoming release. The company is forecasted to report an EPS of $10.67, showcasing a 9.55% upward movement from the corresponding quarter of the prior year. Meanwhile, the latest consensus estimate predicts the revenue to be $8.41 billion, indicating a 41.7% increase compared to the same quarter of the previous year.

For the full year, the Zacks Consensus Estimates project earnings of $54.95 per share and a revenue of $38.26 billion, demonstrating changes of +39.47% and +32.43%, respectively, from the preceding year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for MercadoLibre. Recent revisions tend to reflect the latest near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical 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. Over the past month, the Zacks Consensus EPS estimate has moved 8.58% lower. MercadoLibre currently has a Zacks Rank of #3 (Hold).

From a valuation perspective, MercadoLibre is currently exchanging hands at a Forward P/E ratio of 31.45. This expresses a premium compared to the average Forward P/E of 15.96 of its industry.

We can additionally observe that MELI currently boasts a PEG ratio of 0.85. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. MELI's industry had an average PEG ratio of 0.9 as of yesterday's close.

The Internet - Commerce industry is part of the Retail-Wholesale sector. At present, this industry carries a Zacks Industry Rank of 157, placing it within the bottom 36% of over 250 industries.

The Zacks Industry Rank gauges the strength of our individual 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.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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