MercadoLibre (MELI) Advances But Underperforms Market: Key Facts

The latest trading session saw MercadoLibre (MELI) ending at $1,528.84, denoting a +0.62% adjustment from its last day's close. This move lagged the S&P 500's daily gain of 0.89%. Meanwhile, the Dow experienced a rise of 1.03%, and the technology-dominated Nasdaq saw an increase of 1.25%.

The the stock of operator of an online marketplace and payments system in Latin America has fallen by 12.68% in the past month, lagging the Retail-Wholesale sector's gain of 3.51% and the S&P 500's gain of 3.56%.

Investors will be eagerly watching for the performance of MercadoLibre in its upcoming earnings disclosure. The company is forecasted to report an EPS of $7.44, showcasing an 87.41% upward movement from the corresponding quarter of the prior year. In the meantime, our current consensus estimate forecasts the revenue to be $3.98 billion, indicating a 31.17% growth compared to the corresponding quarter of the prior year.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $36.06 per share and a revenue of $17.87 billion, indicating changes of +85.3% and +23.49%, respectively, from the former year.

Any recent changes to analyst estimates for MercadoLibre should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 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. The Zacks Consensus EPS estimate has moved 2.19% higher within the past month. MercadoLibre is currently a Zacks Rank #3 (Hold).

With respect to valuation, MercadoLibre is currently being traded at a Forward P/E ratio of 42.13. For comparison, its industry has an average Forward P/E of 20.4, which means MercadoLibre is trading at a premium to the group.

One should further note that MELI currently holds a PEG ratio of 0.99. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The average PEG ratio for the Internet - Commerce industry stood at 0.6 at the close of the market yesterday.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 87, finds itself in the top 35% echelons of all 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.

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

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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