MercadoLibre Stock Analysis (NASDAQ:MELI)
MercadoLibre Analysis Video
View MercadoLibre stock analysis video. This is our MELI analyst opinion covering the buy and sell arguments for MELI stock.
Mercadolibre Inc Stock Rating (3.3/5)
Our MercadoLibre stock opinion is based on fundamentals of the company. This MercadoLibre stock analysis is based on latest Q3 earnings for 2016. The stock price analysis takes into account a company's valuation metrics.
Should you buy MELI stock?
- The Year Over Year (YoY) revenue growth for MercadoLibre was 36.9% in 2016 Q3.
- Revenue growth has been tremendous with a compounded annual growth of over the last 5 years.
- MercadoLibre had a healthy average operating margin of 19.5% over the last 4 quarters.
- LTM Net margins were good at 16.1% for MercadoLibre.
- The company has an operating cash flow which is 2.6 times the net income. We see this as a positive signal.
- MercadoLibre generates a high return on invested capital of 36.1%.
- MercadoLibre has a good Return On Equity (ROE) of 34.1%.
- The company has a good Free Cash Flow (FCF) margin of 34.1%.
Should you sell MELI stock?
- With a debt/equity ratio of 0.77, MercadoLibre is highly leveraged in comparison to Retail-Wholesale peers.
- The MELI stock currently trades at a PE of 56, which is expensive, compared to the industry average of 19.4.
- The company is trading at a price to sales multiple of 10.3, which is overvalued in comparison to the Internet Commerce industry average multiple of 0.7.