MERCADOLIBRE INC (MELI)
US58733R1023 - Common Stock
MELI gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 32 industry peers in the Broadline Retail industry. While MELI belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. MELI is showing excellent growth while it is valued at reasonable prices. Keep and eye on this one! These ratings would make MELI suitable for growth investing!
1. Profitability
1.1 Basic Checks
In the past year MELI was profitable.
MELI had a positive operating cash flow in the past year.
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
Looking at the Return On Assets, with a value of 6.35%, MELI is in the better half of the industry, outperforming 68.75% of the companies in the same industry.
Looking at the Return On Equity, with a value of 35.91%, MELI belongs to the top of the industry, outperforming 90.63% of the companies in the same industry.
MELI has a better Return On Invested Capital (15.45%) than 84.38% of its industry peers.
The Average Return On Invested Capital over the past 3 years for MELI is in line with the industry average of 11.47%.
The 3 year average ROIC (12.44%) for MELI is below the current ROIC(15.45%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.35% | ||
| ROE | 35.91% | ||
| ROIC | 15.45% |
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 has a better Profit Margin (7.57%) than 75.00% of its industry peers.
Looking at the Operating Margin, with a value of 10.81%, MELI is in the better half of the industry, outperforming 78.13% of the companies in the same industry.
MELI's Operating Margin has improved in the last couple of years.
With a decent Gross Margin value of 46.28%, MELI is doing good in the industry, outperforming 65.63% 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 | 10.81% | ||
| PM (TTM) | 7.57% | ||
| GM | 46.28% |
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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so MELI is still creating some value.
The number of shares outstanding for MELI has been increased 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 4.74. This indicates that MELI is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.74, MELI is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
MELI has a debt to FCF ratio of 0.87. This is a very positive value and a sign of high solvency as it would only need 0.87 years to pay back of all of its debts.
MELI has a Debt to FCF ratio of 0.87. This is amongst the best in the industry. MELI outperforms 81.25% of its industry peers.
MELI has a Debt/Equity ratio of 0.78. This is a neutral value indicating MELI is somewhat dependend on debt financing.
MELI's Debt to Equity ratio of 0.78 is on the low side compared to the rest of the industry. MELI is outperformed by 65.63% 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 | 0.78 | ||
| Debt/FCF | 0.87 | ||
| Altman-Z | 4.74 |
ROIC/WACC1.71
WACC9.01%
2.3 Liquidity
A Current Ratio of 1.25 indicates that MELI should not have too much problems paying its short term obligations.
MELI has a Current ratio (1.25) which is comparable to the rest of the industry.
MELI has a Quick Ratio of 1.22. 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 1.22 is in line compared to the rest of the industry. MELI outperforms 53.13% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.25 | ||
| Quick Ratio | 1.22 |
3. Growth
3.1 Past
MELI shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 45.04%, which is quite impressive.
The Revenue has grown by 40.24% 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)45.04%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%9.36%
Revenue 1Y (TTM)40.24%
Revenue growth 3Y53.87%
Revenue growth 5Y58.65%
Sales Q2Q%41.28%
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 35.62% on average per year.
Based on estimates for the next years, MELI will show a very strong growth in Revenue. The Revenue will grow by 22.47% on average per year.
EPS Next Y91.94%
EPS Next 2Y58.6%
EPS Next 3Y51.08%
EPS Next 5Y35.62%
Revenue Next Year41.4%
Revenue Next 2Y32.72%
Revenue Next 3Y28.36%
Revenue Next 5Y22.47%
3.3 Evolution
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 70.10, which means the current valuation is very expensive for MELI.
62.50% of the companies in the same industry are cheaper than MELI, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of MELI to the average of the S&P500 Index (28.96), we can say MELI is valued expensively.
The Price/Forward Earnings ratio is 40.42, which means the current valuation is very expensive for MELI.
Based on the Price/Forward Earnings ratio, MELI is valued a bit more expensive than the industry average as 62.50% of the companies are valued more cheaply.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.82, MELI is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 70.1 | ||
| Fwd PE | 40.42 |
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 65.63% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, MELI is valued a bit cheaper than the industry average as 65.63% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.28 | ||
| EV/EBITDA | 35.44 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
MELI has a very decent profitability rating, which may justify a higher PE ratio.
MELI's earnings are expected to grow with 51.08% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.76
PEG (5Y)N/A
EPS Next 2Y58.6%
EPS Next 3Y51.08%
5. Dividend
5.1 Amount
No dividends for MELI!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
MERCADOLIBRE INC
NASDAQ:MELI (11/22/2024, 1:04:53 PM)
1986.67
+18.52 (+0.94%)
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 Cap100.72B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Dividend Growth(5Y)
DP
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Surprises & Revisions
EPS beat(2)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 70.1 | ||
| Fwd PE | 40.42 | ||
| 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)0.76
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.35% | ||
| ROE | 35.91% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 10.81% | ||
| PM (TTM) | 7.57% | ||
| GM | 46.28% | ||
| 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 Turnover0.84
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.78 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.25 | ||
| Quick Ratio | 1.22 | ||
| 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)
High Growth Momentum
Growth
EPS 1Y (TTM)45.04%
EPS 3YN/A
EPS 5Y
EPS Q2Q%
EPS Next Y91.94%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)40.24%
Revenue growth 3Y53.87%
Revenue growth 5Y
Sales 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
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FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
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OCF growth 5Y