MERCADOLIBRE INC (MELI)
US58733R1023 - Common Stock
We assign a fundamental rating of 6 out of 10 to MELI. MELI was compared to 33 industry peers in the Broadline Retail industry. MELI has an excellent profitability rating, but there are some minor concerns on its financial health. MELI is not overvalued while it is showing excellent growth. This is an interesting combination. These ratings would make MELI suitable for growth investing!
1. Profitability
1.1 Basic Checks
MELI had positive earnings in the past year.
In the past year MELI had a positive cash flow from operations.
The reported net income has been mixed in the past 5 years: MELI reported negative net income in multiple years.
In the past 5 years MELI always reported a positive cash flow from operatings.
1.2 Ratios
With a decent Return On Assets value of 5.93%, MELI is doing good in the industry, outperforming 69.70% of the companies in the same industry.
With an excellent Return On Equity value of 33.33%, MELI belongs to the best of the industry, outperforming 93.94% of the companies in the same industry.
With an excellent Return On Invested Capital value of 18.49%, MELI belongs to the best of the industry, outperforming 90.91% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for MELI is in line with the industry average of 11.44%.
The 3 year average ROIC (12.44%) for MELI is below the current ROIC(18.49%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.93% | ||
| ROE | 33.33% | ||
| ROIC | 18.49% |
ROA(3y)3.31%
ROA(5y)1.26%
ROE(3y)21.31%
ROE(5y)11.12%
ROIC(3y)12.44%
ROIC(5y)N/A
1.3 Margins
MELI's Profit Margin of 7.17% is fine compared to the rest of the industry. MELI outperforms 75.76% of its industry peers.
MELI's Operating Margin of 12.75% is amongst the best of the industry. MELI outperforms 81.82% of its industry peers.
In the last couple of years the Operating Margin of MELI has grown nicely.
The Gross Margin of MELI (48.79%) is better than 66.67% of its industry peers.
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 | 12.75% | ||
| PM (TTM) | 7.17% | ||
| GM | 48.79% |
OM growth 3Y57.54%
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y5%
GM growth 5Y0.57%
2. Health
2.1 Basic Checks
MELI has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, MELI has more shares outstanding
Compared to 5 years ago, MELI has more shares outstanding
MELI has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 4.82 indicates that MELI is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 4.82, MELI is doing good in the industry, outperforming 75.76% of the companies in the same industry.
MELI has a debt to FCF ratio of 0.86. This is a very positive value and a sign of high solvency as it would only need 0.86 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 0.86, MELI is in the better half of the industry, outperforming 75.76% of the companies in the same industry.
A Debt/Equity ratio of 0.66 indicates that MELI is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.66, MELI is not doing good in the industry: 60.61% of the companies in the same industry are doing better.
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 | 0.66 | ||
| Debt/FCF | 0.86 | ||
| Altman-Z | 4.82 |
ROIC/WACC1.78
WACC10.36%
2.3 Liquidity
MELI has a Current Ratio of 1.27. 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 Current ratio of 1.27 is on the low side compared to the rest of the industry. MELI is outperformed by 69.70% of its industry peers.
MELI has a Quick Ratio of 1.25. 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 (1.25) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.27 | ||
| Quick Ratio | 1.25 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 83.05% over the past year.
The Revenue has grown by 39.23% in the past year. This is a very strong growth!
The Revenue has been growing by 58.65% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)83.05%
EPS 3YN/A
EPS 5YN/A
EPS growth Q2Q70.78%
Revenue 1Y (TTM)39.23%
Revenue growth 3Y53.87%
Revenue growth 5Y58.65%
Revenue growth Q2Q42.67%
3.2 Future
MELI is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 32.16% yearly.
The Revenue is expected to grow by 19.55% on average over the next years. This is quite good.
EPS Next Y74.42%
EPS Next 2Y55.08%
EPS Next 3Y47.34%
EPS Next 5Y32.16%
Revenue Next Year22.64%
Revenue Next 2Y22.88%
Revenue Next 3Y21.71%
Revenue Next 5Y19.55%
3.3 Evolution
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
A Price/Earnings ratio of 75.33 indicates a quite expensive valuation of MELI.
Compared to the rest of the industry, the Price/Earnings ratio of MELI is on the same level as its industry peers.
MELI's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 28.11.
Based on the Price/Forward Earnings ratio of 35.83, the valuation of MELI can be described as expensive.
Based on the Price/Forward Earnings ratio, MELI is valued a bit more expensive than the industry average as 60.61% of the companies are valued more cheaply.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.39, MELI is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 75.33 | ||
| Fwd PE | 35.83 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of MELI is on the same level as its industry peers.
MELI's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. MELI is cheaper than 69.70% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.34 | ||
| EV/EBITDA | 31.28 |
4.3 Compensation for Growth
MELI's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
MELI has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as MELI's earnings are expected to grow with 47.34% in the coming years.
PEG (NY)1.01
PEG (5Y)N/A
EPS Next 2Y55.08%
EPS Next 3Y47.34%
5. Dividend
5.1 Amount
No dividends for MELI!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
MERCADOLIBRE INC
NASDAQ:MELI (5/8/2024, 8:33:57 AM)
1683.54
-5.15 (-0.3%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustryBroadline Retail
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap85.36B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Dividend Growth(5Y)
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Div Incr Years
Div Non Decr Years
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Surprises & Revisions
EPS beat(2)
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EPS NQ rev (1m)
EPS NQ rev (3m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 75.33 | ||
| Fwd PE | 35.83 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)1.01
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.93% | ||
| ROE | 33.33% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 12.75% | ||
| PM (TTM) | 7.17% | ||
| GM | 48.79% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.83
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.66 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.27 | ||
| Quick Ratio | 1.25 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)83.05%
EPS 3YN/A
EPS 5Y
EPS growth Q2Q
EPS Next Y74.42%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)39.23%
Revenue growth 3Y53.87%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y