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 32 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 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.
MELI had a positive operating cash flow in the past year.
MELI had positive earnings in 4 of the past 5 years.
In the past 5 years MELI always reported a positive cash flow from operatings.
1.2 Ratios
MELI has a Return On Assets of 7.58%. This is in the better half of the industry: MELI outperforms 74.19% of its industry peers.
With an excellent Return On Equity value of 43.92%, MELI belongs to the best of the industry, outperforming 96.77% of the companies in the same industry.
MELI has a better Return On Invested Capital (21.73%) than 96.77% 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 11.65%.
The 3 year average ROIC (18.86%) for MELI is below the current ROIC(21.73%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.58% | ||
| ROE | 43.92% | ||
| ROIC | 21.73% |
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 Profit Margin of 9.20%. This is in the better half of the industry: MELI outperforms 77.42% of its industry peers.
MELI's Profit Margin has improved in the last couple of years.
MELI's Operating Margin of 12.66% is amongst the best of the industry. MELI outperforms 83.87% of its industry peers.
MELI's Operating Margin has improved in the last couple of years.
The Gross Margin of MELI (46.09%) is better than 64.52% 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 | 12.66% | ||
| PM (TTM) | 9.2% | ||
| GM | 46.09% |
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.
The number of shares outstanding for MELI remains at a similar level compared to 1 year ago.
The number of shares outstanding for MELI has been increased compared to 5 years ago.
The debt/assets ratio for MELI has been reduced compared to a year ago.
2.2 Solvency
MELI has an Altman-Z score of 4.65. 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 4.65, MELI is in the better half of the industry, outperforming 77.42% of the companies in the same industry.
MELI has a debt to FCF ratio of 0.81. This is a very positive value and a sign of high solvency as it would only need 0.81 years to pay back of all of its debts.
MELI has a Debt to FCF ratio of 0.81. This is amongst the best in the industry. MELI outperforms 83.87% of its industry peers.
MELI has a Debt/Equity ratio of 0.66. This is a neutral value indicating MELI is somewhat dependend on debt financing.
The Debt to Equity ratio of MELI (0.66) is worse than 61.29% 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 | 0.66 | ||
| Debt/FCF | 0.81 | ||
| Altman-Z | 4.65 |
ROIC/WACC2.07
WACC10.51%
2.3 Liquidity
A Current Ratio of 1.21 indicates that MELI should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.21, MELI is doing worse than 64.52% of the companies in the same industry.
MELI has a Quick 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.
MELI's Quick ratio of 1.20 is in line compared to the rest of the industry. MELI outperforms 54.84% of its industry peers.
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 | 1.21 | ||
| Quick Ratio | 1.2 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 92.94% 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 38.89%.
Measured over the past years, MELI shows a very strong growth in Revenue. The Revenue has been growing by 55.35% on average per year.
EPS 1Y (TTM)92.94%
EPS 3Y172.65%
EPS 5YN/A
EPS Q2Q%288%
Revenue 1Y (TTM)38.89%
Revenue growth 3Y43.24%
Revenue growth 5Y55.35%
Sales Q2Q%42.2%
3.2 Future
The Earnings Per Share is expected to grow by 27.28% on average over the next years. This is a very strong growth
The Revenue is expected to grow by 17.48% on average over the next years. This is quite good.
EPS Next Y19.52%
EPS Next 2Y29.26%
EPS Next 3Y26.44%
EPS Next 5Y27.28%
Revenue Next Year22.3%
Revenue Next 2Y22.11%
Revenue Next 3Y21.9%
Revenue Next 5Y17.48%
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
Based on the Price/Earnings ratio of 54.92, the valuation of MELI can be described as expensive.
MELI's Price/Earnings ratio is a bit more expensive when compared to the industry. MELI is more expensive than 61.29% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 29.75. MELI is valued rather expensively when compared to this.
Based on the Price/Forward Earnings ratio of 45.95, the valuation of MELI can be described as expensive.
64.52% of the companies in the same industry are cheaper than MELI, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.44, MELI is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 54.92 | ||
| Fwd PE | 45.95 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, MELI is valued a bit more expensive than the industry average as 64.52% of the companies are valued more cheaply.
Based on the Price/Free Cash Flow ratio, MELI is valued a bit cheaper than the industry average as 70.97% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.87 | ||
| EV/EBITDA | 31.31 |
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.
MELI's earnings are expected to grow with 26.44% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.81
PEG (5Y)N/A
EPS Next 2Y29.26%
EPS Next 3Y26.44%
5. Dividend
5.1 Amount
MELI does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
2070.41
-51.46 (-2.43%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustryBroadline Retail
Earnings (Last)
Earnings (Next)
Inst Owners83.73%
Inst Owner Change-0.34%
Ins Owners0.09%
Ins Owner Change0%
Market Cap104.97B
Analysts83.7
Price Target2311.89 (11.66%)
Short Float %1.35%
Short Ratio1.76
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly Dividend0
Dividend Growth(5Y)N/A
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)16.33%
Min EPS beat(2)-23.22%
Max EPS beat(2)55.87%
EPS beat(4)3
Avg EPS beat(4)15.84%
Min EPS beat(4)-23.22%
Max EPS beat(4)55.87%
EPS beat(8)6
Avg EPS beat(8)8.24%
EPS beat(12)9
Avg EPS beat(12)10.71%
EPS beat(16)11
Avg EPS beat(16)-250.31%
Revenue beat(2)1
Avg Revenue beat(2)-0.07%
Min Revenue beat(2)-1.12%
Max Revenue beat(2)0.98%
Revenue beat(4)3
Avg Revenue beat(4)4.12%
Min Revenue beat(4)-1.12%
Max Revenue beat(4)10.34%
Revenue beat(8)7
Avg Revenue beat(8)3.31%
Revenue beat(12)9
Avg Revenue beat(12)3.04%
Revenue beat(16)12
Avg Revenue beat(16)4.33%
PT rev (1m)0%
PT rev (3m)-3.92%
EPS NQ rev (1m)5.5%
EPS NQ rev (3m)-2.61%
EPS NY rev (1m)-0.04%
EPS NY rev (3m)-5.96%
Revenue NQ rev (1m)3.27%
Revenue NQ rev (3m)1.04%
Revenue NY rev (1m)-0.38%
Revenue NY rev (3m)-1.32%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 54.92 | ||
| Fwd PE | 45.95 | ||
| P/S | 5.05 | ||
| P/FCF | 14.87 | ||
| P/OCF | 13.26 | ||
| P/B | 24.13 | ||
| P/tB | 25.35 | ||
| EV/EBITDA | 31.31 |
EPS(TTM)37.7
EY1.82%
EPS(NY)45.06
Fwd EY2.18%
FCF(TTM)139.21
FCFY6.72%
OCF(TTM)156.17
OCFY7.54%
SpS409.8
BVpS85.82
TBVpS81.68
PEG (NY)2.81
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.58% | ||
| ROE | 43.92% | ||
| ROCE | 30.62% | ||
| ROIC | 21.73% | ||
| ROICexc | 126.76% | ||
| ROICexgc | 147.84% | ||
| OM | 12.66% | ||
| PM (TTM) | 9.2% | ||
| GM | 46.09% | ||
| FCFM | 33.97% |
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-Score6
Asset Turnover0.82
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.66 | ||
| Debt/FCF | 0.81 | ||
| Debt/EBITDA | 0.89 | ||
| Cap/Depr | 139.38% | ||
| Cap/Sales | 4.14% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 243.78% | ||
| Profit Quality | 369.34% | ||
| Current Ratio | 1.21 | ||
| Quick Ratio | 1.2 | ||
| Altman-Z | 4.65 |
F-Score6
WACC10.51%
ROIC/WACC2.07
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)92.94%
EPS 3Y172.65%
EPS 5YN/A
EPS Q2Q%288%
EPS Next Y19.52%
EPS Next 2Y29.26%
EPS Next 3Y26.44%
EPS Next 5Y27.28%
Revenue 1Y (TTM)38.89%
Revenue growth 3Y43.24%
Revenue growth 5Y55.35%
Sales Q2Q%42.2%
Revenue Next Year22.3%
Revenue Next 2Y22.11%
Revenue Next 3Y21.9%
Revenue Next 5Y17.48%
EBIT growth 1Y23.35%
EBIT growth 3Y80.24%
EBIT growth 5YN/A
EBIT Next Year63.83%
EBIT Next 3Y41.27%
EBIT Next 5Y30.22%
FCF growth 1Y52.41%
FCF growth 3Y170.77%
FCF growth 5Y86.33%
OCF growth 1Y54.05%
OCF growth 3Y101.69%
OCF growth 5Y77.37%