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. MELI scores excellent points on both the profitability and health parts. This is a solid base for a good stock. MELI is valued quite expensively, but it does show have an excellent growth rating. 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.
MELI had positive earnings in 4 of the past 5 years.
MELI had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 7.45%, MELI is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
MELI has a better Return On Equity (41.19%) than 96.43% of its industry peers.
MELI has a Return On Invested Capital of 21.15%. This is amongst the best in the industry. MELI outperforms 92.86% 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 11.59%.
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
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.
MELI has a better Operating Margin (12.81%) than 82.14% of its industry peers.
In the last couple of years the Operating Margin of MELI has grown nicely.
MELI has a better Gross Margin (46.13%) than 64.29% 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 | 12.81% | ||
| 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.
MELI has about the same amout of shares outstanding than it did 1 year ago.
Compared to 5 years ago, MELI has more shares outstanding
Compared to 1 year ago, MELI has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 4.90 indicates that MELI is not in any danger for bankruptcy at the moment.
MELI has a Altman-Z score of 4.90. This is in the better half of the industry: MELI outperforms 75.00% 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 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.
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 | 4.9 |
ROIC/WACC2.33
WACC9.07%
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.
The Current ratio of MELI (1.20) is worse than 71.43% of its industry peers.
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.
The Quick ratio of MELI (1.18) 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!
The Revenue has been growing by 55.35% on average over the past years. This is a very strong growth!
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 31.77% on average per year.
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
MELI is valuated quite expensively with a Price/Earnings ratio of 61.51.
The rest of the industry has a similar Price/Earnings ratio as MELI.
MELI is valuated expensively when we compare the Price/Earnings ratio to 27.29, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 35.62, MELI can be considered very expensive at the moment.
MELI's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. MELI is more expensive than 64.29% of the companies in the same industry.
MELI is valuated expensively when we compare the Price/Forward Earnings ratio to 21.74, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 61.51 | ||
| Fwd PE | 35.62 |
4.2 Price Multiples
MELI's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. MELI is more expensive than 60.71% of the companies in the same industry.
MELI's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. MELI is cheaper than 64.29% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.65 | ||
| EV/EBITDA | 34.49 |
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)1.79
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 |
2501.08
-12.97 (-0.52%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustryBroadline Retail
Earnings (Last)
Earnings (Next)
Inst Owners84.81%
Inst Owner Change0%
Ins Owners0.26%
Ins Owner Change0%
Market Cap126.80B
Analysts82.76
Price Target2878.73 (15.1%)
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)10.64%
EPS NQ rev (1m)-1.32%
EPS NQ rev (3m)8.24%
EPS NY rev (1m)1.67%
EPS NY rev (3m)4.78%
Revenue NQ rev (1m)0.04%
Revenue NQ rev (3m)6.19%
Revenue NY rev (1m)1.19%
Revenue NY rev (3m)5.29%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 61.51 | ||
| Fwd PE | 35.62 | ||
| P/S | 5.67 | ||
| P/FCF | 19.65 | ||
| P/OCF | 17.05 | ||
| P/B | 25.34 | ||
| P/tB | 26.66 | ||
| EV/EBITDA | 34.49 |
EPS(TTM)40.66
EY1.63%
EPS(NY)70.22
Fwd EY2.81%
FCF(TTM)127.28
FCFY5.09%
OCF(TTM)146.69
OCFY5.86%
SpS441.4
BVpS98.7
TBVpS93.83
PEG (NY)1.79
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 | 4.9 |
F-Score5
WACC9.07%
ROIC/WACC2.33
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%