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 28 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. These ratings would make MELI suitable 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
The Return On Assets of MELI (7.45%) is better than 75.00% of its industry peers.
MELI's Return On Equity of 41.19% is amongst the best of the industry. MELI outperforms 96.43% of its industry peers.
MELI has a better Return On Invested Capital (21.15%) than 92.86% of its industry peers.
MELI had an Average Return On Invested Capital over the past 3 years of 18.86%. This is significantly above the industry average of 11.59%.
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
With an excellent Profit Margin value of 9.21%, MELI belongs to the best of the industry, outperforming 82.14% of the companies in the same industry.
In the last couple of years the Profit Margin of MELI has grown nicely.
Looking at the Operating Margin, with a value of 12.81%, MELI belongs to the top of the industry, outperforming 82.14% of the companies in the same industry.
In the last couple of years the Operating Margin of MELI has grown nicely.
With a decent Gross Margin value of 46.13%, MELI is doing good in the industry, outperforming 64.29% 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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), MELI is creating value.
The number of shares outstanding for MELI remains at a similar level compared to 1 year ago.
Compared to 5 years ago, MELI has more shares outstanding
MELI has a better debt/assets ratio than last year.
2.2 Solvency
MELI has an Altman-Z score of 4.84. This indicates that MELI is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 4.84, MELI is doing good in the industry, outperforming 75.00% of the companies in the same industry.
MELI has a debt to FCF ratio of 1.00. This is a very positive value and a sign of high solvency as it would only need 1.00 years to pay back of all of its debts.
The Debt to FCF ratio of MELI (1.00) is better than 82.14% 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.
Looking at the Debt to Equity ratio, with a value of 0.57, MELI is doing worse than 64.29% of the companies in the same industry.
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 | 4.84 |
ROIC/WACC2.31
WACC9.16%
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 71.43% of the companies in the same industry.
A Quick Ratio of 1.18 indicates that MELI should not have too much problems paying its short term obligations.
MELI has a Quick ratio (1.18) which is in line with 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
MELI shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 81.92%, which is quite impressive.
Measured over the past years, MELI shows a very strong growth in Earnings Per Share. The EPS has been growing by 172.65% on average per year.
Looking at the last year, MELI shows a very strong growth in Revenue. The Revenue has grown by 37.68%.
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
MELI is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 31.77% yearly.
MELI is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 20.91% yearly.
EPS Next Y34.41%
EPS Next 2Y36.48%
EPS Next 3Y36.14%
EPS Next 5Y31.77%
Revenue Next Year32.1%
Revenue Next 2Y28.29%
Revenue Next 3Y25.94%
Revenue Next 5Y20.91%
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
The Price/Earnings ratio is 60.80, which means the current valuation is very expensive for MELI.
MELI's Price/Earnings ratio is in line with the industry average.
When comparing the Price/Earnings ratio of MELI to the average of the S&P500 Index (27.28), we can say MELI is valued expensively.
Based on the Price/Forward Earnings ratio of 35.20, the valuation of MELI can be described as expensive.
64.29% of the companies in the same industry are cheaper than MELI, based on the Price/Forward Earnings ratio.
MELI's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 21.76.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 60.8 | ||
| Fwd PE | 35.2 |
4.2 Price Multiples
60.71% of the companies in the same industry are cheaper than MELI, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, MELI is valued a bit cheaper than the industry average as 64.29% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.42 | ||
| EV/EBITDA | 33.88 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of MELI may justify a higher PE ratio.
A more expensive valuation may be justified as MELI's earnings are expected to grow with 36.14% in the coming years.
PEG (NY)1.77
PEG (5Y)N/A
EPS Next 2Y36.48%
EPS Next 3Y36.14%
5. Dividend
5.1 Amount
MELI does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
2472.05
-29.35 (-1.17%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustryBroadline Retail
Earnings (Last)
Earnings (Next)
Inst Owners84.81%
Inst Owner Change0.07%
Ins Owners0.26%
Ins Owner Change0%
Market Cap125.33B
Analysts84.14
Price Target2878.73 (16.45%)
Short Float %1.57%
Short Ratio2.02
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)12.44%
PT rev (3m)13.75%
EPS NQ rev (1m)0.88%
EPS NQ rev (3m)8.72%
EPS NY rev (1m)1.67%
EPS NY rev (3m)12.46%
Revenue NQ rev (1m)2.37%
Revenue NQ rev (3m)6.25%
Revenue NY rev (1m)3.87%
Revenue NY rev (3m)5.49%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 60.8 | ||
| Fwd PE | 35.2 | ||
| P/S | 5.6 | ||
| P/FCF | 19.42 | ||
| P/OCF | 16.85 | ||
| P/B | 25.05 | ||
| P/tB | 26.35 | ||
| EV/EBITDA | 33.88 |
EPS(TTM)40.66
EY1.64%
EPS(NY)70.22
Fwd EY2.84%
FCF(TTM)127.28
FCFY5.15%
OCF(TTM)146.69
OCFY5.93%
SpS441.4
BVpS98.7
TBVpS93.83
PEG (NY)1.77
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 | 4.84 |
F-Score5
WACC9.16%
ROIC/WACC2.31
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 Y34.41%
EPS Next 2Y36.48%
EPS Next 3Y36.14%
EPS Next 5Y31.77%
Revenue 1Y (TTM)37.68%
Revenue growth 3Y43.24%
Revenue growth 5Y55.35%
Sales Q2Q%36.97%
Revenue Next Year32.1%
Revenue Next 2Y28.29%
Revenue Next 3Y25.94%
Revenue Next 5Y20.91%
EBIT growth 1Y23.69%
EBIT growth 3Y80.24%
EBIT growth 5YN/A
EBIT Next Year76.57%
EBIT Next 3Y44.13%
EBIT Next 5Y34.95%
FCF growth 1Y78.01%
FCF growth 3Y170.77%
FCF growth 5Y86.33%
OCF growth 1Y84.45%
OCF growth 3Y101.69%
OCF growth 5Y77.37%