This report is an updated version of the report published on 11 November 2022 at 6:37 AM (PDT)
MercadoLibre, Inc.
MELI Details
MercadoLibre, Inc. (NASDAQ: MELI) operates the largest online commerce and payments ecosystem in Latin America. It provides its users with online commerce and payment tools through its online commerce platform and related services.
Financial Results for 3Q’FY22
- The company reached a new record in total revenues of ~$2.7 billion, primarily driven by the Commerce business, partially nullified by the decrease in Fintech business due to a higher mix of more prominent merchants in TPV.
- The quarterly EBIT stood at $296 million, with the operating margin growth to 11.0% in Q3’FY22, highlighting sustainable and profitable growth.
- The company surpassed 40 million unique active users in fintech, and all geographic segments contributed to the growth momentum.
Outlook
MELI's excellent execution, growth opportunities, and strategic investments have placed the company in a better position going ahead. Further, it intends to democratize eCommerce and financial services in Latin America through its continued growth momentum.
Key Risks
The company’s business is subject to the laws, rules, regulations and policies of the countries it operates. Failure to comply with the rules and regulations could adversely affect the operations.
Valuation Methodology: EV/EBITDA Based Relative Valuation (Illustrative)
Stock Recommendation
Over the last one month, the stock has given a return of ~34.85%.
The stock has been valued using EV/EBITDA multiple-based illustrative relative valuation, and the target price so arrived reflects a fall of low double-digit (in % terms). A slight discount has been applied to EV/EBITDA Multiple (NTM) (Peer Average), considering macro environment and trading levels.
Considering the resistance and target level achievement, current trading levels and risks associated, it is prudent to book profits at the current levels. Hence, a ‘Sell’ rating has been provided on the stock at the closing price of USD974.89 per share, up by 4.21% as of 11 November 2022.
Technical Overview:
Daily Price Chart
Markets are trading in a highly volatile zone currently due to certain macro-economic and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.
MercadoLibre, Inc. (MELI) is a part of Kalkine’s Global Big Money Product
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for share price chart is based on November 11, 2022, and all other data such as stock price performance as of November 15, 2022. The reference data in this report has been partly sourced from REFINITIV.
Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.
Disclaimer - This report has been issued by Kalkine Pty Limited (ABN 34 154 808 312) (Australian financial services licence number 425376) (“Kalkine”) and prepared by Kalkine and its related bodies corporate authorised to provide general financial product advice. Kalkine.com.au and associated pages are published by Kalkine.
Any advice provided in this report is general advice only and does not take into account your objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your objectives, financial situation and needs before acting upon it.
There may be a Product Disclosure Statement, Information Statement or other offer document for the securities or other financial products referred to in Kalkine reports. You should obtain a copy of the relevant Product Disclosure Statement, Information Statement or offer document and consider the statement or document before making any decision about whether to acquire the security or product.
You should also seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice in this report or on the Kalkine website. Not all investments are appropriate for all people.
The information in this report and on the Kalkine website has been prepared from a wide variety of sources, which Kalkine, to the best of its knowledge and belief, considers accurate. Kalkine has made every effort to ensure the reliability of information contained in its reports, newsletters and websites. All information represents our views at the date of publication and may change without notice.
Kalkine does not guarantee the performance of, or returns on, any investment. To the extent permitted by law, Kalkine excludes all liability for any loss or damage arising from the use of this report, the Kalkine website and any information published on the Kalkine website (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine hereby limits its liability, to the extent permitted by law, to the resupply of services.
Please also read our Terms & Conditions and Financial Services Guide for further information.
On the date of publishing this report (referred to on the Kalkine website), employees and/or associates of Kalkine and its related entities do not hold interests in any of the securities or other financial products covered on the Kalkine website unless those persons comply with certain safeguards, procedures, and disclosures.
Kalkine Media Pty Ltd, an affiliate of Kalkine Pty Ltd, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.