MercadoLibre (MELI) Outpaces Stock Market Gains: What You Should Know

MercadoLibre (MELI) closed at $1,613.81 in the latest trading session, marking a +1.42% move from the prior day. The stock outpaced the S&P 500's daily gain of 1.02%.

Prior to today's trading, shares of the operator of an online marketplace and payments system in Latin America had gained 3.17% over the past month. This has outpaced the Retail-Wholesale sector's gain of 0.19% and the S&P 500's gain of 3.01% in that time.

Investors will be hoping for strength from MELI as it approaches its next earnings release. On that day, MELI is projected to report earnings of -$0.09 per share, which would represent a year-over-year decline of 108.11%. Our most recent consensus estimate is calling for quarterly revenue of $1.47 billion, up 66.84% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of -$0.91 per share and revenue of $6.41 billion, which would represent changes of -1037.5% and +61.26%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for MELI. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 23.9% higher. MELI currently has a Zacks Rank of #3 (Hold).

Digging into valuation, MELI currently has a Forward P/E ratio of 4846.35. For comparison, its industry has an average Forward P/E of 61.46, which means MELI is trading at a premium to the group.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 191, which puts it in the bottom 25% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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