MERCADOLIBRE INC (MELI) Stock Fundamental Analysis
NASDAQ:MELI - Nasdaq - US58733R1023 - Common Stock - Currency: USD
MELI gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 31 industry peers in the Broadline Retail industry. MELI scores excellent points on both the profitability and health parts. This is a solid base for a good stock. 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
MELI had positive earnings in the past year.
MELI had a positive operating cash flow in the past year.
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 has a Return On Assets of 7.45%. This is in the better half of the industry: MELI outperforms 74.19% of its industry peers.
Looking at the Return On Equity, with a value of 41.19%, MELI belongs to the top of the industry, outperforming 96.77% of the companies in the same industry.
MELI's Return On Invested Capital of 21.15% is amongst the best of the industry. MELI outperforms 93.55% 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 11.52%.
The 3 year average ROIC (18.86%) for MELI is below the current ROIC(21.15%), indicating increased profibility in the last year.
| 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 better Profit Margin (9.21%) than 83.87% of its industry peers.
In the last couple of years the Profit Margin of MELI has grown nicely.
MELI has a better Operating Margin (12.81%) than 83.87% of its industry peers.
MELI's Operating Margin has improved in the last couple of years.
With a decent Gross Margin value of 46.13%, MELI is doing good in the industry, outperforming 67.74% of the companies in the same industry.
In the last couple of years the Gross Margin of MELI has remained more or less at the same level.
| 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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so MELI is creating value.
The number of shares outstanding for MELI remains at a similar level compared to 1 year ago.
The number of shares outstanding for MELI has been increased compared to 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 5.02. This indicates that MELI is financially healthy and has little risk of bankruptcy at the moment.
MELI has a Altman-Z score of 5.02. This is in the better half of the industry: MELI outperforms 77.42% 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.
MELI has a Debt to FCF ratio of 1.00. This is amongst the best in the industry. MELI outperforms 80.65% of its industry peers.
A Debt/Equity ratio of 0.57 indicates that MELI is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.57, MELI is not doing good in the industry: 61.29% of the companies in the same industry are doing better.
Even though the debt/equity ratio score it not favorable for MELI, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.57 | ||
| Debt/FCF | 1 | ||
| Altman-Z | 5.02 |
ROIC/WACC2.08
WACC10.17%
2.3 Liquidity
A Current Ratio of 1.20 indicates that MELI should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.20, MELI is doing worse than 67.74% 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's Quick ratio of 1.18 is in line compared to the rest of the industry. MELI outperforms 54.84% of its industry peers.
MELI does not score too well on the current and quick ratio evaluation. However, as it has 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!
MELI shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 55.35% yearly.
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
Based on estimates for the next years, MELI will show a very strong growth in Earnings Per Share. The EPS will grow by 30.31% on average per year.
Based on estimates for the next years, MELI will show a quite strong growth in Revenue. The Revenue will grow by 19.86% on average per year.
EPS Next Y32.21%
EPS Next 2Y35.68%
EPS Next 3Y35.73%
EPS Next 5Y30.31%
Revenue Next Year27.17%
Revenue Next 2Y25.38%
Revenue Next 3Y24.43%
Revenue Next 5Y19.86%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 64.09, the valuation of MELI can be described as expensive.
The rest of the industry has a similar Price/Earnings ratio as MELI.
The average S&P500 Price/Earnings ratio is at 25.91. MELI is valued rather expensively when compared to this.
MELI is valuated quite expensively with a Price/Forward Earnings ratio of 37.55.
Compared to the rest of the industry, the Price/Forward Earnings ratio of MELI indicates a slightly more expensive valuation: MELI is more expensive than 64.52% of the companies listed in the same industry.
MELI is valuated expensively when we compare the Price/Forward Earnings ratio to 21.85, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 64.09 | ||
| Fwd PE | 37.55 |
4.2 Price Multiples
61.29% of the companies in the same industry are cheaper than MELI, based on the Enterprise Value to EBITDA ratio.
61.29% of the companies in the same industry are more expensive than MELI, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.47 | ||
| EV/EBITDA | 35.76 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates MELI does not grow enough to justify the current Price/Earnings ratio.
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)1.99
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 |
2606.01
+4.04 (+0.16%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustryBroadline Retail
Earnings (Last)
Earnings (Next)
Inst Owners83.73%
Inst Owner Change-0.18%
Ins Owners0.09%
Ins Owner Change0%
Market Cap132.12B
Analysts84.14
Price Target2560.16 (-1.76%)
Short Float %1.52%
Short Ratio1.52
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)-1.61%
PT rev (3m)10.74%
EPS NQ rev (1m)7.33%
EPS NQ rev (3m)17.45%
EPS NY rev (1m)3.93%
EPS NY rev (3m)10.62%
Revenue NQ rev (1m)2.29%
Revenue NQ rev (3m)4.03%
Revenue NY rev (1m)1.12%
Revenue NY rev (3m)4.13%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 64.09 | ||
| Fwd PE | 37.55 | ||
| P/S | 5.9 | ||
| P/FCF | 20.47 | ||
| P/OCF | 17.77 | ||
| P/B | 26.4 | ||
| P/tB | 27.77 | ||
| EV/EBITDA | 35.76 |
EPS(TTM)40.66
EY1.56%
EPS(NY)69.41
Fwd EY2.66%
FCF(TTM)127.28
FCFY4.88%
OCF(TTM)146.69
OCFY5.63%
SpS441.4
BVpS98.7
TBVpS93.83
PEG (NY)1.99
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 | 5.02 |
F-Score5
WACC10.17%
ROIC/WACC2.08
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 5Y30.31%
Revenue 1Y (TTM)37.68%
Revenue growth 3Y43.24%
Revenue growth 5Y55.35%
Sales Q2Q%36.97%
Revenue Next Year27.17%
Revenue Next 2Y25.38%
Revenue Next 3Y24.43%
Revenue Next 5Y19.86%
EBIT growth 1Y23.69%
EBIT growth 3Y80.24%
EBIT growth 5YN/A
EBIT Next Year71.5%
EBIT Next 3Y41.27%
EBIT Next 5Y33.61%
FCF growth 1Y78.01%
FCF growth 3Y170.77%
FCF growth 5Y86.33%
OCF growth 1Y84.45%
OCF growth 3Y101.69%
OCF growth 5Y77.37%