Core Insights - MercadoLibre (NASDAQ: MELI) has outperformed the S&P 500 with a 28% return over the past year despite poor performance in Mexican and Brazilian equities [1] - The company generates 77.3% of its revenues from Mexico and Brazil, indicating a strong reliance on these markets for its financial performance [1] Company Performance - The stock of MercadoLibre has doubled the S&P 500's performance in the last year, showcasing its strong growth trajectory [1] - The company is based in Argentina but has significant revenue exposure to Mexico and Brazil, which are critical markets for its operations [1]

Core Insights - MercadoLibre has experienced significant stock growth since its IPO in 2007, increasing over 110 times from an initial price of $18 per share [1] - Despite concerns about its high P/E ratio of 53 and operating in a volatile Latin American market, there are reasons to believe the stock still has considerable growth potential [2] Company Overview - MercadoLibre operates across 18 Latin American countries, generating revenue primarily from e-commerce, fintech, and logistics services [3] - The company has adapted to regional challenges by launching Mercado Pago for fintech services and Mercado Envios for shipping and fulfillment [4] Financial Performance - In 2024, MercadoLibre achieved a revenue growth of 37%, with net income reaching $1.9 billion, marking a 94% increase year-over-year [5] - Analysts project a revenue increase of 25% in 2025 and 23% in 2026, which could support a forward P/E ratio of 42 [5] Market Position - MercadoLibre's market capitalization is approximately $100 billion, significantly smaller than Amazon's $2.1 trillion market cap, indicating potential for future growth [6] - As the company continues to expand its services and improve the lives of Latin Americans, it is positioned for substantial returns in the coming years [6]

Core Insights - The Zacks Premium service provides tools for investors to enhance their stock market engagement and confidence through daily updates, research reports, and stock screens [1] Zacks Style Scores - Zacks Style Scores are indicators that assist investors in selecting stocks likely to outperform the market within 30 days, rated from A to F based on value, growth, and momentum characteristics [2] - The Value Score focuses on identifying undervalued stocks using financial ratios like P/E, PEG, and Price/Sales [3] - The Growth Score emphasizes a company's financial health and future outlook, analyzing projected and historical earnings, sales, and cash flow [4] - The Momentum Score leverages trends in stock prices and earnings estimates to identify optimal times for investment [5] - The VGM Score combines all three Style Scores, providing a comprehensive indicator for evaluating stocks based on value, growth, and momentum [6] Zacks Rank - The Zacks Rank is a proprietary model that utilizes earnings estimate revisions to facilitate portfolio building, with 1 (Strong Buy) stocks achieving an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [7][8] - Investors are encouraged to select stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B to maximize potential success [9] - Stocks with lower ranks, such as 4 (Sell) or 5 (Strong Sell), may still have high Style Scores but are likely to experience declining earnings forecasts [10] Company Spotlight: MercadoLibre - MercadoLibre, Inc., based in Buenos Aires, is a leading e-commerce platform in South America, dominating markets in several countries including Brazil and Argentina based on unique visitors and page views [11] - The company holds a Zacks Rank of 2 (Buy) and a VGM Score of A, making it an attractive option for growth investors [11] - MercadoLibre is projected to achieve year-over-year earnings growth of 26% for the current fiscal year, with recent earnings estimates revised upward by six analysts [12] - The Zacks Consensus Estimate for MercadoLibre's earnings has increased by $3.74 to $47.50 per share, alongside an average earnings surprise of 16.4% [12]

Core Insights - Mercado Libre launched a new podcast series titled CFO Perspectives, featuring CFO Martin de los Santos discussing the company's performance and future outlook following Q4 2024 results [1][2] - 2024 was a historic year for Mercado Libre, marking its 25th anniversary and achieving significant milestones, including 100 million unique buyers and 61 million monthly active users [3] Financial Performance - In 2024, Mercado Libre achieved consolidated net revenue of US$21 billion and gross merchandise value (GMV) of US$51.5 billion, with over 1.8 billion products sold through Mercado Envios [5] - The company emphasizes its commitment to investing in logistics, credit growth, and advertising to capture opportunities in the Latin American market [2][3] Strategic Focus - The company aims to enhance online commerce participation, promote financial inclusion, and expand its advertising business [3] - Mercado Libre operates a comprehensive ecosystem that includes e-commerce, digital banking, and various services, catering to over 100 million annual active buyers [5]

Core Insights - Mercado Libre launched a new podcast series titled CFO Perspectives, featuring CFO Martin de los Santos discussing the company's performance and future outlook following Q4 2024 results [1][2] - 2024 was a historic year for Mercado Libre, marking its 25th anniversary and achieving significant milestones, including 100 million unique buyers and 61 million monthly active users [3] Financial Performance - In 2024, Mercado Libre achieved consolidated net revenue of US$21 billion and gross merchandise value (GMV) of US$51.5 billion, with over 1.8 billion products sold through Mercado Envios [5] - The company aims to continue investing in online commerce, financial inclusion, and advertising to capture growth opportunities in Latin America [3] Company Overview - Founded in 1999, Mercado Libre operates in 18 countries and employs over 84,000 people, providing a comprehensive ecosystem for e-commerce and fintech solutions [5] - The platform facilitates various services, including buying, selling, advertising, credit, insurance, and payment solutions, catering to both online and offline transactions [5]

Company Performance - MercadoLibre (MELI) closed at $2,009.34, down 1.76% from the previous trading session, underperforming the S&P 500's gain of 0.55% [1] - Over the past month, shares of MercadoLibre increased by 1.61%, outperforming the Retail-Wholesale sector's decline of 7.03% and the S&P 500's decline of 5.56% [1] Upcoming Earnings - Analysts expect MercadoLibre to report earnings of $7.82 per share, reflecting a year-over-year growth of 15.34% [2] - The Zacks Consensus Estimate for revenue is projected at $5.5 billion, indicating a 27% increase from the previous year [2] Full Year Projections - For the full year, earnings are projected at $47.50 per share and revenue at $25.89 billion, representing year-over-year changes of +26.03% and +24.59%, respectively [3] Analyst Forecast Revisions - Recent revisions to analyst forecasts for MercadoLibre are important as they reflect short-term business dynamics, with positive revisions indicating a favorable business outlook [4] Estimate Revisions and Share Price Momentum - Research shows that estimate revisions correlate with near-term share price momentum, and investors can utilize the Zacks Rank for actionable insights [5] Zacks Rank and Performance - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), has shown that 1 stocks have delivered an average annual return of +25% since 1988 [6] - The Zacks Consensus EPS estimate for MercadoLibre has increased by 8.06% over the past month, and the company currently holds a Zacks Rank of 2 (Buy) [6] Valuation Metrics - MercadoLibre has a Forward P/E ratio of 43.06, which is a premium compared to the industry average Forward P/E of 21.95 [7] - The company has a PEG ratio of 1.15, aligning with the Internet-Commerce industry's average PEG ratio of 1.15 [7] Industry Context - The Internet-Commerce industry is part of the Retail-Wholesale sector and currently holds a Zacks Industry Rank of 65, placing it in the top 26% of over 250 industries [8] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [8]

Core Insights - MercadoLibre's stock gained 10% in February following a strong earnings report, alleviating concerns about economic volatility in its operating regions and boosting investor confidence in its potential [1][2] Group 1: Company Performance - The company operates an e-commerce platform across 18 Latin American countries, holding a leading position in the region and leveraging its first-mover advantage [2] - Revenue increased by 96% year over year (currency neutral), gross merchandise volume rose by 56%, and total payment volume grew by 49%, indicating robust performance in both e-commerce and financial services [4] - Net income surged by 278%, and free cash flow increased by 111%, showcasing the company's strong financial health [4] Group 2: Growth and Expansion - MercadoLibre is expanding its credit portfolio, which grew by 74% year over year, and assets under management increased by 129%, reflecting growth in its financial services segment [5] - The company plans to launch its first digital bank in Mexico, further diversifying its offerings [5] - E-commerce in MercadoLibre's markets is still underdeveloped compared to the U.S., presenting significant growth opportunities, as evidenced by a 24% increase in unique buyers in the fourth quarter of 2024 compared to the previous year [6] Group 3: Market Conditions - Despite economic volatility and currency devaluation in key markets like Argentina and Brazil, the company's strong performance is fostering greater confidence in its resilience and growth potential [7] - The stock currently trades at a forward one-year P/E ratio of 33, which is considered an attractive valuation for a high-growth stock, suggesting it may be a good time to invest [8]

Core Viewpoint - MercadoLibre is positioned as a leading growth stock in Latin America, with significant potential for future expansion in e-commerce and fintech sectors, driven by its strong performance metrics and market opportunities [2][5][12]. Company Overview - MercadoLibre operates similarly to Amazon, providing e-commerce services across 18 Latin American countries and has developed a fintech business to cater to underbanked populations [3][4]. - The company has diversified its offerings, including advertising, asset management, and payment solutions, maintaining a first-mover advantage in many areas [4]. Current Performance - In the fourth quarter of 2024, MercadoLibre reported a 96% year-over-year increase in revenue, with gross merchandise volume up 56% and total payment volume up 49% [5]. - The credit portfolio grew by 74%, and adjusted free cash flow increased by 111%, with net income rising to $649 million from $165 million the previous year [5]. Market Potential - E-commerce penetration in MercadoLibre's markets is only 14.4%, indicating substantial room for growth compared to the U.S. market [8]. - The total market opportunity for e-commerce is projected to grow by 54%, from $151 billion in 2023 to $232 billion by 2028, with a forecasted e-commerce penetration of 17.4% [9]. - The retail advertising market in the region is expected to triple by 2028, reaching $5 billion, highlighting additional growth avenues [9]. Fintech Opportunities - MercadoLibre is the leading fintech company in Mexico, Argentina, and Chile, and holds the second position in Brazil, where banking penetration is low [10]. - Less than half of the Mexican population has a bank account, and in Brazil, a significant portion of credit is controlled by a few large banks, presenting an opportunity for disruption [10]. Historical Performance - Over the past decade, MercadoLibre has significantly increased shareholder value, with a $10,000 investment growing to over $160,000 [11]. Future Growth Projections - If MercadoLibre maintains a compound annual growth rate of 30% currency neutral over the next 10 years, revenue could rise from $21.7 billion to nearly $300 billion [12].

Market Overview - The recent market selloff has affected nearly all sectors, driven by fears related to trade wars, tariffs, and economic uncertainty, yet it may present investment opportunities for stocks near support levels or perceived discounts [1] MercadoLibre - MercadoLibre, Inc. is Latin America's largest e-commerce and fintech platform, operating in 18 countries and connecting millions of buyers and sellers [2] - Despite a strong Q4 2024 earnings report, MercadoLibre's stock has fallen over 11% from its 52-week highs, attributed to broader market weakness rather than company fundamentals [3] - Q4 2024 revenue reached $6.1 billion, a 37% year-over-year increase, surpassing Wall Street's estimate of $5.9 billion; net income surged to $639 million, exceeding the forecast of $402 million [4] - The gross merchandise volume hit $14.5 billion, up 56% when adjusted for currency fluctuations, while Mercado Pago processed $58.9 billion in payments, a 33% increase [4] - The stock is returning to a key support zone, suggesting a potential buying opportunity for investors [5] PayPal - PayPal Holdings is one of the largest fintech companies globally, but its stock has recently declined, down nearly 19% year-to-date [6][7] - The Q4 2024 earnings report showed revenue growth of 4% year-over-year to $8.37 billion, beating analyst estimates, with net income at $1.2 billion and adjusted EPS of $1.19 [8] - PayPal announced a $15 billion share buyback program, indicating confidence in its cash flow, which increased by 40% to $2.1 billion for the quarter [9] - Despite solid earnings, the stock dropped nearly 10% post-earnings due to concerns over slowing growth in branded checkout and lower transaction take rates [10] - Currently trading below its 200-day moving average and near a support zone around $65, PayPal may be an attractive buy-the-dip candidate for long-term investors [11] Conclusion - Both MercadoLibre and PayPal have demonstrated strong earnings yet are trading at potential discounts, making them worthy of consideration for investors seeking quality stocks with solid fundamentals and promising technical setups [12]

Core Viewpoint - MercadoLibre is considered a "no-brainer" investment due to its strong growth potential and diverse business model in Latin America [4][5]. Company Overview - MercadoLibre operates as a logistics network, e-commerce platform, advertising business, and payments processor across multiple countries in Latin America [4]. - The company has experienced significant growth, with revenue rising nearly 38% to $21 billion in 2024 [5]. Growth Potential - E-commerce in Latin America is projected to grow at a 9% compound annual rate through the end of the decade, with the e-commerce penetration rate expected to increase from 58% to 67% by 2029 [6]. - Millions of new e-commerce users are anticipated in the next five years, which could nearly double MercadoLibre's e-commerce business if it maintains its current market share [7]. Financial Performance - MercadoLibre is not only growing its revenue but is also doing so profitably, with operating profit increasing at a faster rate than revenue over the past three years [8]. - Favorable economic conditions in Latin America support ongoing profitable growth for MercadoLibre [9].