MercadoLibre (MELI) Increases Despite Market Slip: Here's What You Need to Know

MercadoLibre (MELI) closed the most recent trading day at $1,619.20, moving +1.23% from the previous trading session. The stock's change was more than the S&P 500's daily loss of 0.4%. Meanwhile, the Dow gained 0.11%, and the Nasdaq, a tech-heavy index, lost 0.73%.

Heading into today, shares of the operator of an online marketplace and payments system in Latin America had lost 8.99% over the past month, lagging the Retail-Wholesale sector's loss of 6.92% and the S&P 500's loss of 7.34%.

The upcoming earnings release of MercadoLibre will be of great interest to investors. The company is expected to report EPS of $10.67, up 9.55% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $8.41 billion, up 41.7% from the year-ago period.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $53.43 per share and a revenue of $38.79 billion, indicating changes of +35.61% and +34.24%, respectively, from the former year.

Any recent changes to analyst estimates for MercadoLibre should also be noted by investors. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 11.18% decrease. MercadoLibre presently features a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that MercadoLibre has a Forward P/E ratio of 29.94 right now. This represents a premium compared to its industry average Forward P/E of 14.99.

It's also important to note that MELI currently trades at a PEG ratio of 0.81. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. By the end of yesterday's trading, the Internet - Commerce industry had an average PEG ratio of 0.89.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 180, putting it in the bottom 27% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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