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MercadoLibre (MELI) Advances While Market Declines: Some Information for Investors

MercadoLibre (MELI) closed the latest trading day at $1,582.14, indicating a +0.1% change from the previous session's end. The stock outperformed the S&P 500, which registered a daily loss of 0.04%. Meanwhile, the Dow experienced a drop of 0.15%, and the technology-dominated Nasdaq saw an increase of 0.12%.

Heading into today, shares of the operator of an online marketplace and payments system in Latin America had lost 9.12% over the past month, lagging the Retail-Wholesale sector's gain of 0.37% and the S&P 500's gain of 4.15% in that time.

The investment community will be closely monitoring the performance of MercadoLibre in its forthcoming earnings report. On that day, MercadoLibre is projected to report earnings of $8.94 per share, which would represent year-over-year growth of 73.26%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.74 billion, up 38.7% from the year-ago period.

For the full year, the Zacks Consensus Estimates are projecting earnings of $33.81 per share and revenue of $19.7 billion, which would represent changes of +73.74% and +36.13%, respectively, from the prior year.


Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for MercadoLibre. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.44% lower. Right now, MercadoLibre possesses a Zacks Rank of #3 (Hold).

Digging into valuation, MercadoLibre currently has a Forward P/E ratio of 46.75. This represents a premium compared to its industry's average Forward P/E of 20.

It's also important to note that MELI currently trades at a PEG ratio of 1.15. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. Internet - Commerce stocks are, on average, holding a PEG ratio of 0.95 based on yesterday's closing prices.

The Internet - Commerce industry is part of the Retail-Wholesale sector. At present, this industry carries a Zacks Industry Rank of 71, placing it within the top 29% of over 250 industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.

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