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MercadoLibre (MELI) Up 3.7% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for MercadoLibre (MELI - Free Report) . Shares have added about 3.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is MercadoLibre due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
MercadoLibre reported second-quarter 2023 earnings of $5.16 per share, which surpassed the Zacks Consensus Estimate by 24.9%. Further, the figure reflects a significant jump of 112.3% from the year-ago quarter.
The company’s revenues surged 31.5% on a year-over-year basis (57.2% on a FX-neutral basis) to $3.41 billion. The top line surpassed the Zacks Consensus Estimate by 4.3%.
The total revenues were driven by accelerating commerce and fintech revenues, which grew 38% and 24% year over year, respectively.
Increasing total payments volume (TPV), courtesy of the robust Mercado Pago, aided the company.
MercadoLibre’s rising gross merchandise volume (GMV) remained another positive. Strong shipment growth also contributed well to the reported results.
Quarter in Detail
Brazil: Net revenues in the second quarter were $1.78 billion (52.1% of the total revenues), rising 23% year over year.
Argentina: The market generated revenues of $771 million (22.6% of the top line), which surged 30% year over year.
Mexico: Net revenues in the reported quarter were $703 million (20.6% of the total revenues), soaring 64% year over year.
Other countries: The markets generated revenues of $161 million (4.7% of the total revenues), increasing 29.8% on a year-over-year basis.
Key Metrics
GMV of $10.51 billion jumped 22.9% and 47.2% on a reported and an FX-neutral basis, respectively, from the year-ago quarter. The figure surpassed the consensus mark of $10.04 billion.
The number of successful items sold was 325 million, which increased 18.2% year over year and topped the consensus mark of 310 million. The number of successful items shipped rose 20.8% year over year to 319 million, which beat the consensus mark of 303 million.
TPV increased 39.3% and 96.6% year over year on a reported and an FX-neutral basis, respectively, to $42.06 billion. This was driven by the strong performance of Mercado Pago. The figure came ahead of the Zacks Consensus Estimate of $40.8 billion.
Off-Marketplace TPV was above $31 billion, up 129% year over year on a FX-neutral basis.
Acquiring TPV, which includes on-platform, online payments, MPoS and QR payments, was $27.3 billion, up 31.2% year over year.
Also, $14.8 billion of digital accounts’ TPV, including wallet payments, P2P transfers between Mercado Pago accounts and card transactions, surged 57.4% year over year.
TPV on the marketplace was $11.07 billion, up 23% year over year. Total payment transactions increased by 68.9% year over year to 2.1 billion.
Unique active users totaled 109 million, up 29.8% year over year. The figure came ahead of the Zacks Consensus Estimate of 101 million.
Operating Details
For the second quarter, the gross margin was 50.4%, expanding 100 basis points (bps) year over year.
Operating expenses were $1.16 billion, which increased 12.4% year over year. As a percentage of revenues, the figure contracted 580 bps from the year-ago quarter to 34% in the reported quarter.
The operating margin was 16.3%, expanding 670 bps from the prior-year quarter.
Balance Sheet
As of Jun 30, 2023, cash and cash equivalents were $1.86 billion, down from $2.14 billion on Mar 31, 2023.
Short-term investments were $2.8 billion for the second quarter, up from $2.5 billion in the previous quarter.
Accounts receivable amounted to $160 million, up from $132 million in the first quarter.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
The consensus estimate has shifted 25.86% due to these changes.
VGM Scores
At this time, MercadoLibre has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise MercadoLibre has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
MercadoLibre belongs to the Zacks Internet - Commerce industry. Another stock from the same industry, Match Group (MTCH - Free Report) , has gained 1.5% over the past month. More than a month has passed since the company reported results for the quarter ended June 2023.
Match Group reported revenues of $829.55 million in the last reported quarter, representing a year-over-year change of +4.4%. EPS of $0.48 for the same period compares with $0.89 a year ago.
Match Group is expected to post earnings of $0.53 per share for the current quarter, representing a year-over-year change of -8.6%. Over the last 30 days, the Zacks Consensus Estimate has changed -1%.
Match Group has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.
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MercadoLibre (MELI) Up 3.7% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for MercadoLibre (MELI - Free Report) . Shares have added about 3.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is MercadoLibre due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
MercadoLibre's Q2 Earnings Beat, Revenues Rise Y/Y
MercadoLibre reported second-quarter 2023 earnings of $5.16 per share, which surpassed the Zacks Consensus Estimate by 24.9%. Further, the figure reflects a significant jump of 112.3% from the year-ago quarter.
The company’s revenues surged 31.5% on a year-over-year basis (57.2% on a FX-neutral basis) to $3.41 billion. The top line surpassed the Zacks Consensus Estimate by 4.3%.
The total revenues were driven by accelerating commerce and fintech revenues, which grew 38% and 24% year over year, respectively.
Increasing total payments volume (TPV), courtesy of the robust Mercado Pago, aided the company.
MercadoLibre’s rising gross merchandise volume (GMV) remained another positive. Strong shipment growth also contributed well to the reported results.
Quarter in Detail
Brazil: Net revenues in the second quarter were $1.78 billion (52.1% of the total revenues), rising 23% year over year.
Argentina: The market generated revenues of $771 million (22.6% of the top line), which surged 30% year over year.
Mexico: Net revenues in the reported quarter were $703 million (20.6% of the total revenues), soaring 64% year over year.
Other countries: The markets generated revenues of $161 million (4.7% of the total revenues), increasing 29.8% on a year-over-year basis.
Key Metrics
GMV of $10.51 billion jumped 22.9% and 47.2% on a reported and an FX-neutral basis, respectively, from the year-ago quarter. The figure surpassed the consensus mark of $10.04 billion.
The number of successful items sold was 325 million, which increased 18.2% year over year and topped the consensus mark of 310 million. The number of successful items shipped rose 20.8% year over year to 319 million, which beat the consensus mark of 303 million.
TPV increased 39.3% and 96.6% year over year on a reported and an FX-neutral basis, respectively, to $42.06 billion. This was driven by the strong performance of Mercado Pago. The figure came ahead of the Zacks Consensus Estimate of $40.8 billion.
Off-Marketplace TPV was above $31 billion, up 129% year over year on a FX-neutral basis.
Acquiring TPV, which includes on-platform, online payments, MPoS and QR payments, was $27.3 billion, up 31.2% year over year.
Also, $14.8 billion of digital accounts’ TPV, including wallet payments, P2P transfers between Mercado Pago accounts and card transactions, surged 57.4% year over year.
TPV on the marketplace was $11.07 billion, up 23% year over year. Total payment transactions increased by 68.9% year over year to 2.1 billion.
Unique active users totaled 109 million, up 29.8% year over year. The figure came ahead of the Zacks Consensus Estimate of 101 million.
Operating Details
For the second quarter, the gross margin was 50.4%, expanding 100 basis points (bps) year over year.
Operating expenses were $1.16 billion, which increased 12.4% year over year. As a percentage of revenues, the figure contracted 580 bps from the year-ago quarter to 34% in the reported quarter.
The operating margin was 16.3%, expanding 670 bps from the prior-year quarter.
Balance Sheet
As of Jun 30, 2023, cash and cash equivalents were $1.86 billion, down from $2.14 billion on Mar 31, 2023.
Short-term investments were $2.8 billion for the second quarter, up from $2.5 billion in the previous quarter.
Accounts receivable amounted to $160 million, up from $132 million in the first quarter.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
The consensus estimate has shifted 25.86% due to these changes.
VGM Scores
At this time, MercadoLibre has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise MercadoLibre has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
MercadoLibre belongs to the Zacks Internet - Commerce industry. Another stock from the same industry, Match Group (MTCH - Free Report) , has gained 1.5% over the past month. More than a month has passed since the company reported results for the quarter ended June 2023.
Match Group reported revenues of $829.55 million in the last reported quarter, representing a year-over-year change of +4.4%. EPS of $0.48 for the same period compares with $0.89 a year ago.
Match Group is expected to post earnings of $0.53 per share for the current quarter, representing a year-over-year change of -8.6%. Over the last 30 days, the Zacks Consensus Estimate has changed -1%.
Match Group has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.