MercadoLibre Inc (NASDAQ:MELI): A Strong CAN SLIM Candidate
By Mill Chart
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MercadoLibre Inc (NASDAQ:MELI) operates a leading e-commerce and fintech platform across Latin America. The company provides a range of services, including online marketplaces, digital payments, logistics, and advertising solutions.
The CAN SLIM investing method, developed by William O’Neil, combines fundamental and technical analysis to identify high-growth stocks with strong momentum. Stocks that meet CAN SLIM criteria often exhibit accelerating earnings, strong institutional support, and relative price strength.
Why MercadoLibre Fits the CAN SLIM Criteria
C – Current Earnings Growth
MercadoLibre reported a 288% year-over-year EPS growth in its most recent quarter, far exceeding the CAN SLIM minimum threshold of 20%. Revenue also surged 42.2%, indicating strong demand for its services.
A – Annual Earnings Growth
Over the past three years, MercadoLibre's EPS has grown at an annualized rate of 172.65%, well above the 25% minimum recommended by CAN SLIM. This demonstrates sustained profitability and expansion.
N – New Products & Market Leadership
As a dominant player in Latin America’s e-commerce and digital payments space, MercadoLibre continues to innovate with new financial and logistics solutions. The stock is trading near its 52-week high, aligning with CAN SLIM’s preference for stocks breaking out to new highs.
S – Supply & Demand
MercadoLibre has a debt-to-equity ratio of 0.66, below the CAN SLIM threshold of 2, indicating manageable leverage. Trading volume remains healthy, supporting liquidity.
L – Market Leadership
With a relative strength (CRS) of 94.52, MercadoLibre outperforms nearly 95% of the market, a key trait for CAN SLIM stocks.
I – Institutional Sponsorship
Institutional ownership stands at 83.73%, below the 85% threshold, suggesting room for further institutional accumulation.
M – Market Direction
The S&P 500’s long-term trend is negative, but MercadoLibre’s strong uptrend suggests resilience.
Technical & Fundamental Overview
Technical Analysis
MercadoLibre’s technical rating is 10/10, with both short- and long-term trends positive. The stock is trading near its 52-week high, supported by strong momentum. View the full technical report here.
Fundamental Analysis
The company scores 7/10 on fundamentals, with exceptional profitability (ROE of 43.92%) and growth metrics. Valuation remains high, but strong earnings justify the premium. See the full fundamental report.
Conclusion
MercadoLibre meets multiple CAN SLIM criteria, making it a compelling candidate for growth investors. However, market conditions should be monitored before entry.
