Overall MELI gets a fundamental rating of 7 out of 10. We evaluated MELI against 30 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 expensive, but it does show an excellent growth. With these ratings, MELI could be worth investigating further for growth and quality investing!.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

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.
MELI had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

MELI has a Return On Assets of 5.66%. This is in the better half of the industry: MELI outperforms 70.00% of its industry peers.
Looking at the Return On Equity, with a value of 33.40%, MELI belongs to the top of the industry, outperforming 96.67% of the companies in the same industry.
The Return On Invested Capital of MELI (18.27%) is better than 93.33% 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 9.28%.

		Industry Rank	Sector Rank
ROA	5.66%
ROE	33.4%
ROIC	18.27%

ROA(3y)5.57%

ROA(5y)3.5%

ROE(3y)34.15%

ROE(5y)21.57%

ROIC(3y)20.35%

ROIC(5y)14.34%

1.3 Margins

MELI has a Profit Margin of 7.93%. This is in the better half of the industry: MELI outperforms 76.67% of its industry peers.
MELI's Profit Margin has improved in the last couple of years.
MELI has a better Operating Margin (11.96%) than 86.67% of its industry peers.
MELI's Operating Margin has improved in the last couple of years.
MELI has a better Gross Margin (45.14%) 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	11.96%
PM (TTM)	7.93%
GM	45.14%

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%

More info and screens

ROA

ROE

ROIC

Operating and Profit Margin

Show most profitable peers

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
MELI has a better debt/assets ratio than last year.

2.2 Solvency

An Altman-Z score of 3.48 indicates that MELI is not in any danger for bankruptcy at the moment.
MELI has a Altman-Z score of 3.48. This is in the better half of the industry: MELI outperforms 76.67% of its industry peers.
MELI has a debt to FCF ratio of 0.91. This is a very positive value and a sign of high solvency as it would only need 0.91 years to pay back of all of its debts.
MELI's Debt to FCF ratio of 0.91 is amongst the best of the industry. MELI outperforms 83.33% of its industry peers.
MELI has a Debt/Equity ratio of 0.55. This is a neutral value indicating MELI is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.55, MELI is in line with its industry, outperforming 43.33% 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	0.55
Debt/FCF	0.91
Altman-Z	3.48

ROIC/WACC2.04

WACC8.94%

2.3 Liquidity

MELI has a Current Ratio of 1.17. 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 1.17 is on the low side compared to the rest of the industry. MELI is outperformed by 76.67% of its industry peers.
MELI has a Quick Ratio of 1.15. 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 (1.15) 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	1.17
Quick Ratio	1.15

More info and screens

WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

Show peers with great health

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 44.60% 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.
Looking at the last year, MELI shows a very strong growth in Revenue. The Revenue has grown by 36.94%.
The Revenue has been growing by 55.35% on average over the past years. This is a very strong growth!

EPS 1Y (TTM)44.6%

EPS 3Y172.65%

EPS 5YN/A

EPS Q2Q%6.26%

Revenue 1Y (TTM)36.94%

Revenue growth 3Y43.24%

Revenue growth 5Y55.35%

Sales Q2Q%39.48%

3.2 Future

MELI is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 31.97% yearly.
MELI is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 24.56% yearly.

EPS Next Y11.47%

EPS Next 2Y27.93%

EPS Next 3Y31.86%

EPS Next 5Y31.97%

Revenue Next Year38.59%

Revenue Next 2Y33.64%

Revenue Next 3Y29.53%

Revenue Next 5Y24.56%

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.

More info and screens

Find the best growth stocks

Show best growing peers

4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 52.41 indicates a quite expensive valuation of MELI.
The rest of the industry has a similar Price/Earnings ratio as MELI.
Compared to an average S&P500 Price/Earnings ratio of 28.32, MELI is valued quite expensively.
With a Price/Forward Earnings ratio of 34.81, MELI can be considered very expensive at the moment.
Based on the Price/Forward Earnings ratio, MELI is valued a bit more expensive than the industry average as 63.33% of the companies are valued more cheaply.
MELI is valuated rather expensively when we compare the Price/Forward Earnings ratio to 25.57, which is the current average of the S&P500 Index.

		Industry Rank	Sector Rank
PE	52.41
Fwd PE	34.81

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 70.00% 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 66.67% of the companies are valued more expensively.

		Industry Rank	Sector Rank
P/FCF	12.65
EV/EBITDA	27.62

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates MELI does not grow enough to justify the current Price/Earnings ratio.
MELI has an outstanding 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 31.86% in the coming years.