MERCADOLIBRE INC (MELI) Stock Fundamental Analysis
NASDAQ:MELI - Nasdaq - US58733R1023 - Common Stock - Currency: USD
Taking everything into account, MELI scores 7 out of 10 in our fundamental rating. MELI was compared to 30 industry peers in the Broadline Retail industry. Both the health and profitability get an excellent rating, making MELI a very profitable company, without any liquidiy or solvency issues. MELI shows excellent growth, but is valued quite expensive already. This makes MELI very considerable for growth and quality investing!
1. Profitability
1.1 Basic Checks
In the past year MELI was profitable.
In the past year MELI had a positive cash flow from operations.
Of the past 5 years MELI 4 years were profitable.
In the past 5 years MELI always reported a positive cash flow from operatings.
1.2 Ratios
MELI's Return On Assets of 7.45% is fine compared to the rest of the industry. MELI outperforms 76.67% of its industry peers.
MELI has a better Return On Equity (41.19%) than 96.67% of its industry peers.
MELI's Return On Invested Capital of 21.15% is amongst the best of the industry. MELI outperforms 93.33% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for MELI is significantly above the industry average of 11.34%.
The last Return On Invested Capital (21.15%) for MELI is above the 3 year average (18.86%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.45% | ||
| ROE | 41.19% | ||
| ROIC | 21.15% |
ROA(3y)5.57%
ROA(5y)3.5%
ROE(3y)34.15%
ROE(5y)21.57%
ROIC(3y)18.86%
ROIC(5y)13.44%
1.3 Margins
MELI has a Profit Margin of 9.21%. This is amongst the best in the industry. MELI outperforms 83.33% of its industry peers.
MELI's Profit Margin has improved in the last couple of years.
MELI has a Operating Margin of 12.81%. This is amongst the best in the industry. MELI outperforms 83.33% of its industry peers.
In the last couple of years the Operating Margin of MELI has grown nicely.
Looking at the Gross Margin, with a value of 46.13%, MELI is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
MELI's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.81% | ||
| PM (TTM) | 9.21% | ||
| GM | 46.13% |
OM growth 3Y25.83%
OM growth 5YN/A
PM growth 3Y98.37%
PM growth 5YN/A
GM growth 3Y2.74%
GM growth 5Y-0.81%
2. Health
2.1 Basic Checks
MELI has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
The number of shares outstanding for MELI remains at a similar level compared to 1 year ago.
MELI has more shares outstanding than it did 5 years ago.
The debt/assets ratio for MELI has been reduced compared to a year ago.
2.2 Solvency
MELI has an Altman-Z score of 4.73. This indicates that MELI is financially healthy and has little risk of bankruptcy at the moment.
MELI has a better Altman-Z score (4.73) than 76.67% of its industry peers.
The Debt to FCF ratio of MELI is 1.00, which is an excellent value as it means it would take MELI, only 1.00 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of MELI (1.00) is better than 80.00% of its industry peers.
MELI has a Debt/Equity ratio of 0.57. This is a neutral value indicating MELI is somewhat dependend on debt financing.
MELI's Debt to Equity ratio of 0.57 is on the low side compared to the rest of the industry. MELI is outperformed by 66.67% of its industry peers.
Although MELI does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.57 | ||
| Debt/FCF | 1 | ||
| Altman-Z | 4.73 |
ROIC/WACC2.3
WACC9.18%
2.3 Liquidity
MELI has a Current Ratio of 1.20. This is a normal value and indicates that MELI is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.20, MELI is doing worse than 73.33% of the companies in the same industry.
MELI has a Quick Ratio of 1.18. This is a normal value and indicates that MELI is financially healthy and should not expect problems in meeting its short term obligations.
MELI has a Quick ratio (1.18) which is comparable to the rest of the industry.
The current and quick ratio evaluation for MELI is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.2 | ||
| Quick Ratio | 1.18 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 81.92% over the past year.
MELI shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 172.65% yearly.
The Revenue has grown by 37.68% in the past year. This is a very strong growth!
Measured over the past years, MELI shows a very strong growth in Revenue. The Revenue has been growing by 55.35% on average per year.
EPS 1Y (TTM)81.92%
EPS 3Y172.65%
EPS 5YN/A
EPS Q2Q%43.66%
Revenue 1Y (TTM)37.68%
Revenue growth 3Y43.24%
Revenue growth 5Y55.35%
Sales Q2Q%36.97%
3.2 Future
MELI is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 31.51% yearly.
The Revenue is expected to grow by 20.57% on average over the next years. This is a very strong growth
EPS Next Y32.21%
EPS Next 2Y35.68%
EPS Next 3Y35.73%
EPS Next 5Y31.51%
Revenue Next Year30.55%
Revenue Next 2Y27.47%
Revenue Next 3Y25.9%
Revenue Next 5Y20.57%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 58.71 indicates a quite expensive valuation of MELI.
The rest of the industry has a similar Price/Earnings ratio as MELI.
MELI's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 26.55.
A Price/Forward Earnings ratio of 34.39 indicates a quite expensive valuation of MELI.
MELI's Price/Forward Earnings is on the same level as the industry average.
When comparing the Price/Forward Earnings ratio of MELI to the average of the S&P500 Index (22.40), we can say MELI is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 58.71 | ||
| Fwd PE | 34.39 |
4.2 Price Multiples
60.00% of the companies in the same industry are cheaper than MELI, based on the Enterprise Value to EBITDA ratio.
The rest of the industry has a similar Price/Free Cash Flow ratio as MELI.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.75 | ||
| EV/EBITDA | 32.65 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
MELI has an outstanding profitability rating, which may justify a higher PE ratio.
MELI's earnings are expected to grow with 35.73% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.82
PEG (5Y)N/A
EPS Next 2Y35.68%
EPS Next 3Y35.73%
5. Dividend
5.1 Amount
No dividends for MELI!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
2387
-9.44 (-0.39%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustryBroadline Retail
Earnings (Last)
Earnings (Next)
Inst Owners83.73%
Inst Owner Change0.07%
Ins Owners0.09%
Ins Owner Change0%
Market Cap121.02B
Analysts84.14
Price Target2820.77 (18.17%)
Short Float %1.54%
Short Ratio1.7
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)35.43%
Min EPS beat(2)14.99%
Max EPS beat(2)55.87%
EPS beat(4)3
Avg EPS beat(4)17.01%
Min EPS beat(4)-23.22%
Max EPS beat(4)55.87%
EPS beat(8)6
Avg EPS beat(8)6.84%
EPS beat(12)10
Avg EPS beat(12)12.5%
EPS beat(16)12
Avg EPS beat(16)38.42%
Revenue beat(2)2
Avg Revenue beat(2)3.28%
Min Revenue beat(2)0.98%
Max Revenue beat(2)5.59%
Revenue beat(4)3
Avg Revenue beat(4)2.93%
Min Revenue beat(4)-1.12%
Max Revenue beat(4)6.26%
Revenue beat(8)7
Avg Revenue beat(8)3.52%
Revenue beat(12)10
Avg Revenue beat(12)3.33%
Revenue beat(16)13
Avg Revenue beat(16)4.02%
PT rev (1m)10.18%
PT rev (3m)22.01%
EPS NQ rev (1m)9.7%
EPS NQ rev (3m)17.73%
EPS NY rev (1m)3.93%
EPS NY rev (3m)10.62%
Revenue NQ rev (1m)6.33%
Revenue NQ rev (3m)8.12%
Revenue NY rev (1m)3.05%
Revenue NY rev (3m)6.74%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 58.71 | ||
| Fwd PE | 34.39 | ||
| P/S | 5.41 | ||
| P/FCF | 18.75 | ||
| P/OCF | 16.27 | ||
| P/B | 24.18 | ||
| P/tB | 25.44 | ||
| EV/EBITDA | 32.65 |
EPS(TTM)40.66
EY1.7%
EPS(NY)69.41
Fwd EY2.91%
FCF(TTM)127.28
FCFY5.33%
OCF(TTM)146.69
OCFY6.15%
SpS441.4
BVpS98.7
TBVpS93.83
PEG (NY)1.82
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.45% | ||
| ROE | 41.19% | ||
| ROCE | 29.8% | ||
| ROIC | 21.15% | ||
| ROICexc | 130.55% | ||
| ROICexgc | 155.15% | ||
| OM | 12.81% | ||
| PM (TTM) | 9.21% | ||
| GM | 46.13% | ||
| FCFM | 28.84% |
ROA(3y)5.57%
ROA(5y)3.5%
ROE(3y)34.15%
ROE(5y)21.57%
ROIC(3y)18.86%
ROIC(5y)13.44%
ROICexc(3y)207.02%
ROICexc(5y)N/A
ROICexgc(3y)457.7%
ROICexgc(5y)N/A
ROCE(3y)26.57%
ROCE(5y)18.94%
ROICexcg growth 3Y46.42%
ROICexcg growth 5YN/A
ROICexc growth 3Y51.24%
ROICexc growth 5YN/A
OM growth 3Y25.83%
OM growth 5YN/A
PM growth 3Y98.37%
PM growth 5YN/A
GM growth 3Y2.74%
GM growth 5Y-0.81%
F-Score5
Asset Turnover0.81
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.57 | ||
| Debt/FCF | 1 | ||
| Debt/EBITDA | 0.82 | ||
| Cap/Depr | 154.96% | ||
| Cap/Sales | 4.4% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 212.43% | ||
| Profit Quality | 313.1% | ||
| Current Ratio | 1.2 | ||
| Quick Ratio | 1.18 | ||
| Altman-Z | 4.73 |
F-Score5
WACC9.18%
ROIC/WACC2.3
Cap/Depr(3y)116.48%
Cap/Depr(5y)176.74%
Cap/Sales(3y)3.99%
Cap/Sales(5y)5.36%
Profit Quality(3y)451.37%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)81.92%
EPS 3Y172.65%
EPS 5YN/A
EPS Q2Q%43.66%
EPS Next Y32.21%
EPS Next 2Y35.68%
EPS Next 3Y35.73%
EPS Next 5Y31.51%
Revenue 1Y (TTM)37.68%
Revenue growth 3Y43.24%
Revenue growth 5Y55.35%
Sales Q2Q%36.97%
Revenue Next Year30.55%
Revenue Next 2Y27.47%
Revenue Next 3Y25.9%
Revenue Next 5Y20.57%
EBIT growth 1Y23.69%
EBIT growth 3Y80.24%
EBIT growth 5YN/A
EBIT Next Year76.57%
EBIT Next 3Y44.13%
EBIT Next 5Y34.7%
FCF growth 1Y78.01%
FCF growth 3Y170.77%
FCF growth 5Y86.33%
OCF growth 1Y84.45%
OCF growth 3Y101.69%
OCF growth 5Y77.37%