MercadoLibre (MELI) closed at $1,852.22 in the latest trading session, marking a +2.46% move from the prior day. This change outpaced the S&P 500's 0.42% gain on the day. Elsewhere, the Dow gained 0.29%, while the tech-heavy Nasdaq added 0.29%.
The operator of an online marketplace and payments system in Latin America's stock has climbed by 12.29% in the past month, exceeding the Retail-Wholesale sector's gain of 0.24% and the S&P 500's gain of 2.2%.
Market participants will be closely following the financial results of MercadoLibre in its upcoming release. It is anticipated that the company will report an EPS of $8.69, marking a 15.71% fall compared to the same quarter of the previous year. Simultaneously, our latest consensus estimate expects the revenue to be $9.77 billion, showing a 43.9% escalation compared to the year-ago quarter.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $40.97 per share and a revenue of $40.36 billion, representing changes of +3.98% and +39.68%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for MercadoLibre. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. As of now, MercadoLibre holds a Zacks Rank of #5 (Strong Sell).
In the context of valuation, MercadoLibre is at present trading with a Forward P/E ratio of 44.13. This indicates a premium in contrast to its industry's Forward P/E of 16.81.
It is also worth noting that MELI currently has a PEG ratio of 1.11. 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 industry had an average PEG ratio of 1.05 as trading concluded yesterday.
The Internet - Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 181, putting it in the bottom 27% of all 250+ industries.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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MercadoLibre, Inc. (MELI): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).