andresr/E+ via Getty Images This article analyzes MercadoLibre (NASDAQ:MELI) with a particular focus on questions about valuation. How much should an investor be willing to pay for hyper-growth? It depends to a large degree on how long that growth can be sustained before it begins to fade. A declining growth rate produces a double whammy of slower growth combined with a lower valuation. The current high growth rate of MELI is indisputable, but a new investor's criterion must be on the sustainability of ...

Growth investors focus on stocks that are seeing above-average financial growth, as this feature helps these securities garner the market's attention and deliver solid returns. But finding a great growth stock is not easy at all.That's because, these stocks usually carry above-average risk and volatility. In fact, betting on a stock for which the growth story is actually over or nearing its end could lead to significant loss.However, the task of finding cutting-edge growth stocks is made easy with the help ...

The most recent trading session ended with MercadoLibre (MELI) standing at $1,591.68, reflecting a -0.41% shift from the previouse trading day's closing. The stock's change was less than the S&P 500's daily loss of 0.07%.Shares of the operator of an online marketplace and payments system in Latin America have depreciated by 0.87% over the course of the past month, underperforming the Retail-Wholesale sector's gain of 4.94% and the S&P 500's gain of 3.98%.Analysts and investors alike will be keeping a close ...

Cathie Wood bounced back in 2023 after back-to-back years of disappointment. The CEO and co-founder of Ark Invest is trying to keep her winning streak going as an aggressive growth-stock investor this year. She's been adding to some of her existing positions in 2024, including a few notable purchases on Monday.Wood kicked off the new trading week by adding to her stakes in Nu (NU 0.06%), MercadoLibre (MELI -0.24%), and Toast (TOST -0.24%). Let's see what she might be seeing in these promising growth stocks. ...

While Warren Buffett’s piece of wisdom – to paraphrase, don’t bet against America – has proven sound, investors looking ahead may want to consider emerging markets stocks. As the phrase implies, we’re talking about economies still in their growth phase. That contrasts with the U.S., which stands in more of a maturity cycle.Fundamentally, emerging markets stocks appeal to more risk-tolerant investors due to their potentially greater upside prospects. Nothing is guaranteed, to be clear. However, when you’re d ...

Rmcarvalho/iStock via Getty Images Nobel laureate Simon Kuznets argued that the world has four types of economies: developed, underdeveloped, Japan, and Argentina. This has never been more accurate than today, when understanding the Argentinian economy will lead us to analyze unique periods, relatively obscure economies, and philosophical premises like the nature of money and the psychological biases of loss aversion. Nevertheless, understanding this context is vital to discovering how to play the Argentini ...

alvarez/E+ via Getty Images We previously covered MercadoLibre, Inc. (NASDAQ:MELI) in September 2023, discussing its solid prospects over the next few years, thanks to its well-diversified vertically-integrated offerings across online retail, logistics, fintech, and advertising. Combined with the management's efforts to aggressively grow market share profitably, we had confidently reiterated the stock as a long-term buy, preferably after a moderate pullback to $1.1K. In this article, we shall discuss why ou ...

toeytoey2530 Investment Thesis We all know the outstanding performance that Amazon has presented in the last decade and the great ecosystem that it has managed to set up, benefiting the user and the company at the same time. However, there is a company that has managed to create something similar in a neglected geographical location, difficult to operate (providing competitive advantages in the form of know-how) and that presents greater growth thanks to its structural characteristics. In this article I wou ...

Maxiphoto Investment thesis MercadoLibre (NASDAQ:MELI) is an absolute sensation. The company demonstrates monster profitability and the current revenue growth momentum is massive. Long-term consensus earnings estimates are very optimistic and my analysis suggests that it is fair given strong secular tailwinds behind MELI's back. The company's business model is like a snowball where large scale provides it with the massive competitive edge. Furthermore, my valuation analysis suggests the stock is substan ...

Financial Data and Key Metrics Changes - The company reported a strong Q3 2023 with income from operations more than doubling year-on-year for the fourth consecutive quarter, achieving an 18% EBITDA margin compared to 16% in the previous quarter [2][20] - Revenue growth accelerated, with Mexico's revenues growing above 60% year-on-year and Brazil posting around 40% growth [2][3] - The company achieved a record of 50 million buyers and market share gains, particularly in Brazil and Mexico [3] Business Line Data and Key Metrics Changes - In the commerce business, there was an acceleration in GMV and items sold growth across the main geographies, with Brazil being the largest contributor to profit growth [3][20] - The fintech segment saw off-platform TPV acceleration in all main countries, with over 1 million credit cards issued and surpassing $1 billion for the first time [4][20] - The 1P business grew 58% year-over-year, with Brazil showing considerable growth, indicating a strategic priority for the company [67] Market Data and Key Metrics Changes - Brazil and Mexico contributed significantly to the overall revenue growth, with Brazil improving 12 percentage points year-on-year in margins and Mexico improving 6 percentage points [20] - The company is seeing a continuous increase in the number of products used by users, particularly in Brazil, where asset under management is growing near triple digits [28] Company Strategy and Development Direction - The company launched a loyalty program, MELI Mas, aimed at enhancing user engagement and providing a comprehensive content bundle [6][9] - The management emphasized the importance of AI in improving user experience and operational efficiencies, particularly in customer service and fraud prevention [12][36] - The company is focused on long-term growth, investing in logistics and technology to enhance user experience and operational efficiency [21][5] Management's Comments on Operating Environment and Future Outlook - The management expressed confidence in the business's growth trajectory, highlighting the positive impact of recent investments and the potential of AI [12][36] - The company is optimistic about the upcoming Black Friday and holiday season, preparing to meet consumer demand [73] - The management noted that decreasing interest rates in Brazil could positively impact profitability, particularly in the marketplace [79] Other Important Information - The company is actively monitoring competition from new entrants like Temu in Mexico but remains confident in its competitive advantages, particularly in logistics and payment solutions [51] - The company is cautious about credit quality, particularly in Mexico, where early delinquencies have increased slightly by design to accommodate higher origination [68] Q&A Session All Questions and Answers Question: Opportunities for MELI in the next 3-5 years - The CEO highlighted the importance of AI and the company's focus on long-term growth, emphasizing the potential for innovative ideas and efficiencies [12] Question: Evolution of KPIs for leadership compensation - The CEO mentioned that compensation is based on long-term results, with a focus on dynamic business changes and new opportunities [15][16] Question: Profitability and margin improvements - The CFO noted a significant improvement in EBITDA margins, driven by strong performance across various business segments, particularly in Brazil and Mexico [20] Question: Credit business strategy in Brazil - The President of Fintech confirmed an increase in origination and credit card issuance, with positive results from the new cohorts [25] Question: Growth of fintech active users - The President of Fintech attributed growth to the success of remunerated accounts and increased credit offerings [54] Question: Initial subscriber counts for MELI Mas - The CFO stated it is too early to share specific numbers but noted good engagement with the program [57] Question: Logistics monetization update - The company is focused on improving net shipping costs and is not in a rush to monetize fulfillment solutions [58] Question: Synergy of POS business with the rest of MELI - The President of Fintech emphasized the importance of the POS business in providing a comprehensive fintech offering and cross-selling opportunities [61]