MERCADOLIBRE INC (MELI) Stock Fundamental Analysis
NASDAQ:MELI - Nasdaq - US58733R1023 - Common Stock - Currency: USD
Overall MELI gets a fundamental rating of 7 out of 10. We evaluated MELI 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 could make MELI a good candidate 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.
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
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.
The Return On Equity of MELI (41.19%) is better than 96.43% of its industry peers.
MELI's Return On Invested Capital of 21.15% is amongst the best of the industry. MELI outperforms 92.86% of its industry peers.
The Average Return On Invested Capital over the past 3 years for MELI 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
MELI has a better Profit Margin (9.21%) than 82.14% of its industry peers.
In the last couple of years the Profit Margin of MELI has grown nicely.
MELI has a Operating Margin of 12.81%. This is amongst the best in the industry. MELI outperforms 82.14% of its industry peers.
MELI's Operating Margin has improved in the last couple of years.
MELI has a Gross Margin of 46.13%. This is in the better half of the industry: MELI outperforms 64.29% of its industry peers.
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
MELI has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
MELI has about the same amout of shares outstanding than it did 1 year ago.
The number of shares outstanding for MELI has been increased compared to 5 years ago.
MELI has a better debt/assets ratio than last year.
2.2 Solvency
MELI has an Altman-Z score of 4.90. This indicates that MELI is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 4.90, 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.
Looking at the Debt to FCF ratio, with a value of 1.00, MELI belongs to the top of the industry, outperforming 82.14% of the companies in the same industry.
MELI has a Debt/Equity ratio of 0.57. This is a neutral value indicating MELI is somewhat dependend on debt financing.
MELI has a Debt to Equity ratio of 0.57. This is in the lower half of the industry: MELI underperforms 64.29% of its industry peers.
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 | 4.9 |
ROIC/WACC2.33
WACC9.08%
2.3 Liquidity
A Current Ratio of 1.20 indicates that MELI should not have too much problems paying its short term obligations.
MELI has a worse Current ratio (1.20) 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.
With a Quick ratio value of 1.18, MELI perfoms like the industry average, outperforming 53.57% of the companies in the same 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.
The Earnings Per Share has been growing by 172.65% on average over the past years. This is a very strong growth
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
MELI is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 31.77% yearly.
The Revenue is expected to grow by 20.91% on average over the next years. This is a very strong growth
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
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
With a Price/Earnings ratio of 61.83, MELI can be considered very expensive at the moment.
The rest of the industry has a similar Price/Earnings ratio as MELI.
Compared to an average S&P500 Price/Earnings ratio of 27.45, MELI is valued quite expensively.
The Price/Forward Earnings ratio is 35.80, which means the current valuation is very expensive for MELI.
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 64.29% of the companies listed in the same industry.
MELI's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 21.89.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 61.83 | ||
| Fwd PE | 35.8 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, MELI is valued a bit 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 | 19.75 | ||
| 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.
MELI's earnings are expected to grow with 36.14% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.8
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 |
2514.05
+42 (+1.7%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustryBroadline Retail
Earnings (Last)
Earnings (Next)
Inst Owners84.81%
Inst Owner Change-45.4%
Ins Owners0.26%
Ins Owner Change0%
Market Cap127.46B
Analysts82.76
Price Target2878.73 (14.51%)
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 | 61.83 | ||
| Fwd PE | 35.8 | ||
| P/S | 5.7 | ||
| P/FCF | 19.75 | ||
| P/OCF | 17.14 | ||
| P/B | 25.47 | ||
| P/tB | 26.79 | ||
| EV/EBITDA | 34.49 |
EPS(TTM)40.66
EY1.62%
EPS(NY)70.22
Fwd EY2.79%
FCF(TTM)127.28
FCFY5.06%
OCF(TTM)146.69
OCFY5.83%
SpS441.4
BVpS98.7
TBVpS93.83
PEG (NY)1.8
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
WACC9.08%
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%