Why MercadoLibre Stock Sank Today
Shares of Latin American e-commerce platform, logistics network, and financial technology (fintech) giant (NASDAQ: MELI) sank on Thursday after reporting financial results for the third quarter of 2024. The company's profits came up quite short of expectations. And that's why MercadoLibre stock was down nearly 16% as of 1 p.m. ET.
MercadoLibre still has no problem whatsoever with growth -- its Q3 revenue was $5.3 billion, which was up 35% year over year and ahead of expectations. But the company's net profit margin was 7.5%, which was quite a drop from its 9.5% margin in the same quarter of last year. This worked out to earnings per share (EPS) of $7.83. But analysts had expected EPS closer to $10.
Management knew investors would have questions so it wasted no time in explaining why margins contracted. MercadoLibre wants to increase the number of people using its credit cards and it wants to improve on its already top-tier logistics services. The anticipated rise in credit necessitated putting more money aside for potential losses. And investments in infrastructure obviously cost money.
Source Fool.com
Mercadolibre Inc Stock
The stock is an absolute favorite of our community with 39 Buy predictions and no Sell predictions.
With a target price of 2319 € there is a positive potential of 40.48% for Mercadolibre Inc compared to the current price of 1650.8 €.
