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What's in the Cards for MercadoLibre's (MELI) Q1 Earnings?
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MercadoLibre, Inc. (MELI - Free Report) is set to report first-quarter 2020 results on May 5.
For the first quarter, the Zacks Consensus Estimate for sales is pegged at $643.84 million, indicating growth of 35.9% from the prior-year quarter.
Further, the consensus mark stands at a loss per share of 43 cents against earnings of 13 cents reported in the year-ago quarter.
In the last reported quarter, MercadoLibre had reported loss of $1.11 per share, missing the Zacks Consensus Estimate of a loss of 69 cents. Moreover, the figure was wider than a loss of 5 cents per share reported in the year-ago quarter.
Revenues improved 57.5% on a year-over-year basis (84.4% on an FX neutral basis) to $674.3 million. Further, the figure surpassed the Zacks Consensus Estimate of $668 million.
MercadoLibre’s strength across marketplace and non-marketplace businesses is expected to get reflected in the first-quarter results.
Further, the company’s growing initiatives toward strengthening fintech business might have driven the total payment volumes (TPV) in the quarter under review. This, in turn, is expected to have contributed to the first-quarter performance.
Robust mobile-point-of-sale (MPOS) services are anticipated to have bolstered transactions per unique active device in the first quarter. Strong devices – Point Pro and Point Mini – may have aided the company’s device sales in the quarter under review.
Further, strong wallet services are anticipated to have boosted the company’s in-store QR payments volume during the first quarter. Additionally, robust Mercado Pago might have contributed to the TPV in the to-be-reported quarter.
Apart from this, the company’s strengthening online-to-offline offerings are likely to get reflected in the first-quarter performance.
Furthermore, MercadoLibre’s efforts to bolster e-commerce business by promoting branding and loyalty are likely to have driven growth in its unique buyer base in the to-be-reported quarter.
Strong investments on MercadoLibre’s logistics business are expected to have aided the performance of its delivery system in the to-be-reported quarter. Moreover, expanding managed logistics network is likely to have benefited the performance of the business.
Further, free shipping program is anticipated to have helped the company in gaining customer momentum in the first quarter. Moreover, it is likely to have driven shipment growth via MercadoEnvios in the quarter under review.
However, increasing warehousing cost of managed network and expenses related to infrastructure transition on public clouds are likely to have impacted the company’s profitability. Moreover, costs related to free shipping subsidies and discounts on MPOS devices may have weighed on margin expansion in the quarter under review.
Additionally, rising inventory cost of the company thanks to increasing sales of MPOS devices, and rising branding and marketing initiatives are likely to have limited fourth-quarter margins.
What Our Model Says
Our proven model doesn’t conclusively predict an earnings beat for MercadoLibre this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
MercadoLibre has an Earnings ESP of 0.00% and a Zacks Rank #3.
Stocks to Consider
Here are some companies that have the right combination of elements to post an earnings beat this time around.
Shopify Inc. (SHOP - Free Report) has an Earnings ESP of +5.85% and a Zacks Rank #2.
Etsy, Inc. (ETSY - Free Report) has an Earnings ESP of +8.17% and a Zacks Rank #3.
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This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
Image: Bigstock
What's in the Cards for MercadoLibre's (MELI) Q1 Earnings?
MercadoLibre, Inc. (MELI - Free Report) is set to report first-quarter 2020 results on May 5.
For the first quarter, the Zacks Consensus Estimate for sales is pegged at $643.84 million, indicating growth of 35.9% from the prior-year quarter.
Further, the consensus mark stands at a loss per share of 43 cents against earnings of 13 cents reported in the year-ago quarter.
In the last reported quarter, MercadoLibre had reported loss of $1.11 per share, missing the Zacks Consensus Estimate of a loss of 69 cents. Moreover, the figure was wider than a loss of 5 cents per share reported in the year-ago quarter.
Revenues improved 57.5% on a year-over-year basis (84.4% on an FX neutral basis) to $674.3 million. Further, the figure surpassed the Zacks Consensus Estimate of $668 million.
MercadoLibre, Inc. Price and EPS Surprise
MercadoLibre, Inc. price-eps-surprise | MercadoLibre, Inc. Quote
Factors to Note
MercadoLibre’s strength across marketplace and non-marketplace businesses is expected to get reflected in the first-quarter results.
Further, the company’s growing initiatives toward strengthening fintech business might have driven the total payment volumes (TPV) in the quarter under review. This, in turn, is expected to have contributed to the first-quarter performance.
Robust mobile-point-of-sale (MPOS) services are anticipated to have bolstered transactions per unique active device in the first quarter. Strong devices – Point Pro and Point Mini – may have aided the company’s device sales in the quarter under review.
Further, strong wallet services are anticipated to have boosted the company’s in-store QR payments volume during the first quarter. Additionally, robust Mercado Pago might have contributed to the TPV in the to-be-reported quarter.
Apart from this, the company’s strengthening online-to-offline offerings are likely to get reflected in the first-quarter performance.
Furthermore, MercadoLibre’s efforts to bolster e-commerce business by promoting branding and loyalty are likely to have driven growth in its unique buyer base in the to-be-reported quarter.
Strong investments on MercadoLibre’s logistics business are expected to have aided the performance of its delivery system in the to-be-reported quarter. Moreover, expanding managed logistics network is likely to have benefited the performance of the business.
Further, free shipping program is anticipated to have helped the company in gaining customer momentum in the first quarter. Moreover, it is likely to have driven shipment growth via MercadoEnvios in the quarter under review.
However, increasing warehousing cost of managed network and expenses related to infrastructure transition on public clouds are likely to have impacted the company’s profitability. Moreover, costs related to free shipping subsidies and discounts on MPOS devices may have weighed on margin expansion in the quarter under review.
Additionally, rising inventory cost of the company thanks to increasing sales of MPOS devices, and rising branding and marketing initiatives are likely to have limited fourth-quarter margins.
What Our Model Says
Our proven model doesn’t conclusively predict an earnings beat for MercadoLibre this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
MercadoLibre has an Earnings ESP of 0.00% and a Zacks Rank #3.
Stocks to Consider
Here are some companies that have the right combination of elements to post an earnings beat this time around.
Pixelworks, Inc. (PXLW - Free Report) has an Earnings ESP of +5.26% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shopify Inc. (SHOP - Free Report) has an Earnings ESP of +5.85% and a Zacks Rank #2.
Etsy, Inc. (ETSY - Free Report) has an Earnings ESP of +8.17% and a Zacks Rank #3.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>