MercadoLibre Clearly Beats Amazon – Speculative Buy Here (NASDAQ:MELI)

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MELI 5 year stock price

MercadoLibre Inc. (NASDAQ: Meri) has risen unnaturally by 56.65% and is trading at an eye-popping premium of $941.01.no doubt we missed Last June’s bottom was in the $600’s, making us wonder when the next opportunity will come. This feeling Inflation in Latin America It has eased to 6% so far from 6.6% in 2021 and may slow further to 5.1% in 2023. This makes Marquette more optimistic about the region’s e-commerce recovery, pointing to our folly in trying to time the market.

Meanwhile, Amazon (AMZN) made a significant correction to $95.50, approaching a 52-week low of $85.87. Markets are downright illogical because things remain volatile in the short term. oh well.

MELI Continues to Deliver Margin Growth Despite Soft Landing and Recession

MELI Revenue, Net Income ($ Billion) %, EBIT %, EPS

In its recent third quarter 2022 earnings call, MELI actually reported exemplary revenue and bottom line growth despite a modest revenue shortfall of $10 million. It is therefore not surprising that the company is expected to report further expansion of his Q4 2022 revenue growth, with the positive effects of Black Friday, the FIFA World Cup and Christmas. Market analysts expect MELI to deliver an impressive 39.9% year-over-year revenue growth, 47.36% net income and 387.2% EPS despite tough year-over-year comparisons and a supposed recession. I’m here.

MELI Cash/Equivalents, FCF ($ Billion)%, and Debt

In addition, MELI has performed admirably by expanding free cash flow (FCF) generation to $620 million in Q3 2022 and expanding FCF margin to 23%, delivering impressive QoQ and YoY showing growth. The company’s balance sheet is also well-isolated, with cash and equivalents of $2.53 billion and total accounts receivable of $438 million by the latest quarter, representing further year-over-year growth of 47.95% and 92.95%, respectively.

MELI also increased its reliance on long-term debt to $2.71 billion, showing a QoQ increase of 9.16% and a YoY increase of 39.89%. In addition, some of these debts are attributable to our FinTech business, which has proven to be a solid earnings driver with an impressive YoY growth rate of 247.70% by Q3 2022. .

Going forward, Pago is also expected to see a significant increase in revenue, having already delivered 40 million unique users and $32.2 billion in TPV in its most recent quarter. These figures show excellent year-on-year growth rates of 26.58% and 54.06%, indicating that fintech demand has not been destroyed despite rising inflation.

MELI Projected Revenue, Net Income ($ Billion) %, EBIT %, EPS, and FCF %

Most importantly, despite recession fears and rising inflation, MELI’s forward execution remains intact. Market’s optimism is growing, with its top- and bottom-line growth already improving several times since our last analysis. With this, the estimated revenue and net profit for FY2022 are still growing aggressively after August 2022 by He by 2.82% and He by 28.57%.

In addition, MELI’s margins are expected to further expand to 10.6%/6.8% in 2024 from -6.7%/-7.5% in EBIT/net income in 2019 and 6.2%/1.2% in 2021. This naturally expands EPS growth to an ambitious $21.9 by 2024, at a staggering CAGR of 135.6%. No wonder the market analyst remains very bullish on the stock, with his price target at $145,000, up 54.8% from current levels.

In the meantime, we encourage you to read our previous articles. This helps us better understand its position and market opportunities.

• MercadoLibre: $600 Could Come Again Thanks to Global Headwinds
• MercadoLibre: crystal ball looks rich ahead – waiting for rally to be digested

So is MELI stock a buy?sell, or hold?

MELI 5-Year EV/Revenue and P/E Rating

MELI is currently trading very attractively at 4.12x EV/NTM earnings and 60.0x NTM PER, a significant discount from its five-year averages of 9.72x and 1,148.86x respectively. Combined with the above factors, exemplary 5-year total price returns of 245% over 5 years and 1,238.5% over 10 years provide high risk tolerance and maintain investment trajectory over the next 10 years Investors may hold the stock price at current levels. Impressive despite a -51.76% discount from its peak share price of $1.95 million in early 2021.

MELI’s numbers are certainly more impressive than AMZN’s forecast of a 48.37% rally against the $141.69 consensus price target. In the latter, his 5-year total price return was 64.3%, and his 10-year total return was 657.8%, showing dismal so far.

Otherwise, we would like to remain on the sidelines for the time being as the Fed may not turn around as quickly as expected by December 14th. Of course, it all depends on the November Consumer Price Index (CPI) report. weAssuming inflation picks up further, the Fed could hike rates by 75 basis points for the fifth straight time, defying market expectations of a 50 basis point rate hike and the Bank of Canada’s recent easing in October. Coupled with a possible increase in terminal rates to 6% or more, a further market correction is likely by 2023, which could again present a speculative opportunity to load in interested investors. .

Naturally, we also want to draw your attention. If the Fed pivots in earnest in the next two weeks, the bottom-fishing investor could risk losing his MELI sailboat as the overall market will rise. The stock market could start its next decade bull market, just like it did during the last recession in 2008. Only time will tell.