MERCADOLIBRE INC (NASDAQ:MELI) – A Strong CANSLIM Candidate with High Growth Momentum

MERCADOLIBRE INC (NASDAQ:MELI) stands out as a compelling candidate for investors following the CANSLIM strategy. The company, a leading e-commerce and fintech platform in Latin America, demonstrates strong fundamentals and technical strength, aligning well with the CANSLIM criteria.

Key CANSLIM Criteria MET by MELI

• C – Current Earnings & Sales Growth:

  • Quarterly EPS growth of 43.66% (vs. same quarter last year).
  • Revenue growth of 36.97% (vs. same quarter last year).
    Both figures exceed the CANSLIM minimum thresholds of 20% EPS growth and 25% sales growth.

• A – Annual Earnings Growth:

  • Three-year EPS growth of 172.65%, far surpassing the 25% minimum requirement.
  • Return on Equity (ROE) of 41.19%, indicating strong profitability.

• N – New Highs & Market Leadership:

  • The stock is trading near its 52-week high, a positive signal for momentum investors.
  • Relative Strength (CRS) of 93.63 places it in the top 7% of all stocks.

• S – Supply & Demand:

  • Debt-to-equity ratio of 0.57, below the CANSLIM-recommended threshold of 2.
  • Institutional ownership at 83.73%, indicating strong sponsorship without being overly concentrated.

• L – Market Leader:

  • Outperforms 96% of its peers in the Broadline Retail industry.

• I – Institutional Sponsorship:

  • Healthy institutional interest without excessive ownership saturation.

• M – Market Direction:

  • The S&P 500 shows a positive short-term trend, supporting a favorable environment for growth stocks.

Technical & Fundamental Strength

MELI’s technical rating is a perfect 10/10, reflecting strong upward momentum in both short and long-term trends. The stock is trading above key moving averages and recently hit a new 52-week high.

Fundamentally, MELI scores 7/10, with high marks for growth and profitability. While valuation appears stretched (P/E of 64.09), the company’s earnings growth potential may justify the premium.

For a deeper analysis, review the full fundamental report and technical report.

Our CANSLIM High Growth screener lists more high-growth stocks and is updated daily.

Disclaimer

This is not investing advice! The article highlights observations at the time of writing, but you should always conduct your own analysis before making investment decisions.