MercadoLibre (MELI) closed at $1,819.74 in the latest trading session, marking a +1.02% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.02%. On the other hand, the Dow registered a gain of 0.51%, and the technology-centric Nasdaq decreased by 0.18%.
The operator of an online marketplace and payments system in Latin America's stock has climbed by 7.54% in the past month, exceeding the Retail-Wholesale sector's loss of 1.33% and the S&P 500's gain of 0.77%.
The upcoming earnings release of MercadoLibre will be of great interest to investors. The company is expected to report EPS of $8.69, down 15.71% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $9.77 billion, up 43.9% from the prior-year quarter.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $41 per share and revenue of $40.36 billion. These totals would mark changes of +4.06% and +39.68%, respectively, from last year.
Investors should also note any recent changes to analyst estimates for MercadoLibre. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Our research suggests that these changes in estimates have a direct relationship with upcoming 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, 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. Within the past 30 days, our consensus EPS projection has moved 0.07% higher. Currently, MercadoLibre is carrying a Zacks Rank of #2 (Buy).
Looking at valuation, MercadoLibre is presently trading at a Forward P/E ratio of 43.94. This expresses a premium compared to the average Forward P/E of 16.29 of its industry.
Also, we should mention that MELI 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 was holding an average PEG ratio of 1.11 at yesterday's closing price.
The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 155, finds itself in the bottom 37% echelons 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.
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).