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MercadoLibre (MELI) Stock Sinks As Market Gains: What You Should Know

Zacks Equity Research
·2-min read

MercadoLibre (MELI) closed at $1,798.19 in the latest trading session, marking a -0.66% move from the prior day. This change lagged the S&P 500's 0.23% gain on the day. At the same time, the Dow lost 0.03%, and the tech-heavy Nasdaq gained 0.43%.

Heading into today, shares of the operator of an online marketplace and payments system in Latin America had gained 8.45% over the past month, outpacing the Retail-Wholesale sector's loss of 0.21% and the S&P 500's gain of 3.86% in that time.

Investors will be hoping for strength from MELI as it approaches its next earnings release. The company is expected to report EPS of $0.39, up 135.14% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.23 billion, up 82.49% from the year-ago period.

Any recent changes to analyst estimates for MELI should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. Within the past 30 days, our consensus EPS projection has moved 14.38% lower. MELI is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that MELI has a Forward P/E ratio of 483.06 right now. Its industry sports an average Forward P/E of 50.53, so we one might conclude that MELI is trading at a premium comparatively.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 229, which puts it in the bottom 11% 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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