MercadoLibre (MELI) Stock Falls Amid Market Uptick: What Investors Need to Know

MercadoLibre (MELI) closed at $1,685.12 in the latest trading session, marking a -2.51% move from the prior day. The stock trailed the S&P 500, which registered a daily gain of 0.2%. Elsewhere, the Dow gained 0.04%, while the tech-heavy Nasdaq added 0.04%.

Shares of the operator of an online marketplace and payments system in Latin America have depreciated by 13.86% over the course of the past month, underperforming the Retail-Wholesale sector's loss of 5.49%, and the S&P 500's loss of 0.35%.

Market participants will be closely following the financial results of MercadoLibre in its upcoming release. The company is predicted to post an EPS of $9.42, indicating a 13.22% growth compared to the equivalent quarter last year. Our most recent consensus estimate is calling for quarterly revenue of $10.64 billion, up 43.61% from the year-ago period.

For the full year, the Zacks Consensus Estimates are projecting earnings of $39.11 per share and revenue of $41.78 billion, which would represent changes of -0.74% and +44.59%, respectively, from the prior year.

Any recent changes to analyst estimates for MercadoLibre should also be noted by investors. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. Currently, MercadoLibre is carrying a Zacks Rank of #4 (Sell).

In terms of valuation, MercadoLibre is currently trading at a Forward P/E ratio of 44.19. For comparison, its industry has an average Forward P/E of 15.4, which means MercadoLibre is trading at a premium to the group.

We can also see that MELI currently has a PEG ratio of 1.18. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Internet - Commerce was holding an average PEG ratio of 1.18 at yesterday's closing price.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 194, putting it in the bottom 22% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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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MercadoLibre, Inc. (MELI) : Free Stock Analysis Report

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