MercadoLibre Stock Analysis (NASDAQ:MELI)

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$178.72 $2.55 (1.45%) MELI stock closing price Jan 23, 2017 (Closing)
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MercadoLibre
Updated on : Jan 23, 2017
previous close
MELI 178.7 (0%)
S&P 500 2265.2 (0%)
Closing Price On: Jan 23, 2017
stock rating
RATING: ★★★★★★★★★★ (0/5)
Industry :
Internet Commerce
Sector :
Retail-Wholesale
5 Quarter Revenue
Revenue Growth
2016-Q3
$million
%
YOY GROWTH
Compared to the industry
Long Term Growth
5 Year CAGR:
22.8%
Operating Profit
Operating Margin:
19.5%
Sector Average:
5.4%
5 Quarter Net Profit
Net Margins
2016-Q3
%
LTM Margin
Compared to the industry
Debt/Equity Ratio
Debt:
305.5M
Debt/Equity Ratio:
 0.77
Compared to the industry
Cash Flow
Operating cash flow:
$102.8M
Net Income:
$38.9M
Dividend Yield
MELI dividend yield:
0.31%
PROS      CONS
Recent Growth
Long Term Growth
Operating Margins
Net Margins
Cash Flow
ROIC
High Debt Burden
PE Valuation
PS Valuation
Rating: ★★★★★★★★★★ (0/5)
Relative Valuation
MELI PS :
10.3
Industry PS :
0.7
Sector:   Retail-Wholesale.   *PE adjusted for one time items.
Other Metrics
Return on Invested Capital:
36.1%
Return on Equity:
34.1%
Free Cash Flow Margin:
34.1%
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MercadoLibre Analysis Video

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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.

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