Summary of MercadoLibre, Inc. Conference Call Company Overview - **Company**: MercadoLibre, Inc. (NASDAQ:MELI) - **Date**: September 10, 2024 - **Participants**: Martin de Los Santos (CFO), Irma Sgarz (Goldman Sachs) Key Industry Insights - **E-commerce Growth**: The commerce business in Brazil grew by 36% and in Mexico by 30% in Q2, indicating strong market performance [2][6] - **Credit Penetration**: Credit penetration in Latin America remains low at 14%, with 86% of retail transactions occurring offline, presenting significant growth opportunities [2] - **Advertising Growth**: The advertising business has grown over 50% year-on-year for the past 16 quarters, but only represents 2% of GMV compared to 5-6% for international peers, indicating room for expansion [2] Core Business Strategies - **Ecosystem Synergy**: The dual ecosystem of commerce and Fintech is emphasized, with 25% of transactions in Mexico being processed through MercadoLibre's own payment methods [5] - **Logistics Infrastructure**: 96% of items sold go through MercadoLibre's logistics, with 85% of 1.6 billion packages delivered within two days, showcasing a competitive advantage [2][3] - **Loyalty Program Enhancements**: The Meli Mais loyalty program has been revamped to include Fintech benefits, leading to increased user engagement and lower churn rates [10][13] Financial Performance - **Revenue Growth**: Overall revenues grew by 42%, with significant contributions from improved fulfillment and user experience [7][8] - **User Base Expansion**: The user base for commerce grew by 19%, while Fintech users increased by 37%, indicating strong engagement [8][21] - **Free Cash Flow**: In Q2, the company generated $678 million in free cash flow, totaling nearly $850 million in the first half of the year [35] Investment and Future Outlook - **Logistics Investment**: Continued investment in fulfillment centers is planned, with new centers opening in Mexico and Brazil to support growth [15][16] - **Credit Opportunities**: Mexico is identified as a key market for credit expansion, with less than 20% of the population owning a credit card, and a banking license application is underway [28][29] - **AI Utilization**: AI is being leveraged for various applications, including fraud prevention and customer service, enhancing operational efficiency without significant CapEx [30][31] Marketing and Brand Positioning - **Brand Investments**: Increased marketing investments have led to over 60% of traffic being organic, with successful sponsorships like Copa America reaching 300 million viewers [21][22] - **Advertising Strategy**: The advertising segment is expected to grow significantly, with plans to expand into video advertising on platforms like Disney+ [26][23] Conclusion - **Growth vs. Profitability**: The management emphasizes capturing growth opportunities while gradually improving margins, with a focus on scaling operations efficiently [32] - **Capital Allocation**: With a strong cash position of over $4 billion, the company is not currently considering dividends or share repurchases but may do so in the future if cash flows remain strong [35]

lerbank MELI's High Growth Investment Thesis Is In Overdrive We previously covered MercadoLibre, Inc. (NASDAQ:MELI) in July 2024, discussing why we had reiterated our Buy rating then, attributed to its double beat FQ1'24 earnings call, growing market share in Latam, and robust performance metrics. We had also highlighted a few metrics that readers should look out for in the FQ2'24 earnings call on August 02, 2024, with it underscoring the health of its businesses along with near-term prospects. MELI YTD ...

FG Trade/E+ via Getty ImagesWhen I last wrote about MercadoLibre (NASDAQ:MELI) on April 11, 2024, I recommended it as a strong buy. That analysis has worked out so far. The stock is up 32.22% compared to the S&P 500's (SPX) 6.57% rise. My previous article discussed how investors were disappointed in the company's fourth quarter 2023 earnings report, as it displayed shrinking margins and missed analysts' GAAP earnings-per-share ("EPS") estimates. Since then, the market has been far more pleased with the ...

You only need one, but here are four.Are you looking for a stock demonstrating phenomenal growth with incredible opportunities? One that's profitable and trades at a reasonable valuation? Then MercadoLibre (MELI -2.56%) fits the bill. Read on to see why.1. A never-ending growth machineYou might be surprised to learn that MercadLibre is almost as old as Amazon. However, its Latin American population didn't catch onto the internet as quickly as people did in the U.S. Only recently has MercadoLibre expanded it ...

Leila Melhado MercadoLibre (NASDAQ:MELI) has been on a great run this year, with shares increasing by 38% and finally reaching a new all-time high after 2021. In this article, I want to briefly assess the last quarter and then look at the capital efficiency (reinvestment and return of capital) that led to this stellar performance over the last five years. Shares are up 238% in this time. You can find my last MELI article here. MercadoLibre share price (Seeking Alpha) Q2 earnings follow-up MELI had an except ...

Felipe Gustavo S Borges Investment Thesis As LATAM is projected to grow significantly over the coming decades and internet access increases, the e-commerce boom is expected to continue. The strongest player by market share is MercadoLibre (NASDAQ:MELI), defended by strong competitive advantages in the form of a strong brand, network effect, and scale advantages. Although competitors like Amazon (AMZN) remain, my main concern is management taking more risks to achieve growth for the company. This signals to ...

Robert Way My Coverage & Thesis Update Back in May 2024, I initiated coverage of MercadoLibre, Inc. (NASDAQ:MELI) stock with a "Buy" rating, calling it "a growth beast at a reasonable price". My argumentation was mainly based on the firm's significant growth I saw in its fintech division, with a credit portfolio exceeding $4.4 million and the issuance of 1.5 million credit cards at the time. I expected a continued contraction of MELI's key valuation multiples amid rising earnings of the business, which ...

MercadoLibre (MELI) has shown impressive resilience and growth, with its share price increasing 25.7% in the past month. This stellar performance underscores investor confidence in the company's strong fundamentals despite broader economic uncertainties.MELI’s gain not only compared favorably with the Zacks Internet-Commerce industry’s decline of 1.6% over the same period but also outpaced the broader Zacks Retail-Wholesale sector and the S&P 500’s returns of 2.6% and 2.7%, respectively.The outperformance c ...

Is it time to get on the bandwagon with these three hot stocks?No one can deny it -- the stock market is on fire. As of this writing, the S&P 500 has closed at an all-time high on 38 occasions this year and is up more than 18% year to date. So, it's no surprise that there are lots of stocks making new 52-week highs. But that doesn't mean it's too late to invest in some excellent stocks. Let's examine three in more depth. WalmartFirst up is Walmart (WMT 0.44%). Up 40% year to date and 42% over the last 12 mo ...

MercadoLibre has filed a complaint with Argentina’s competition regulator, alleging that Argentine banks are using an anti-competitive tactic against the company’s FinTech arm, Mercado Pago.In its legal complaint filed with the country’s National Commission in Defense of Competition, MercadoLibre accused the banks of “illegally concentrating” under one payments platform, Bloomberg reported Monday (Aug. 26).“The 36 banks that are part of the MODO wallet make up a cartel to avoid competing between its own dig ...