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MercadoLibre Inc MELI

Rating as of

Morningstar’s Analysis

Valuation
Currency in USD
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

First-Party Sales and Consumer Lending Merit Some Credit, but MercadoLibre Shares Still Pricey

Sean Dunlop Equity Analyst

Analyst Note

| Sean Dunlop |

Wide-moat MercadoLibre continues to broaden the reach of its ecosystem, with quickly growing payment processing, lending, and first-party sales operations paving the way toward high-40% sales growth through 2025, by our forecast. The firm has positioned itself as a one-stop e-commerce solution for Latin American buyers and sellers, adopting the best innovations of global peers and becoming nearly irreplaceable as it pushes fulfillment times ever faster and per transaction costs ever lower. As we consider the explosive potential of its consumer credit business, increase our top-line forecasts commensurate with first-party inventory penetration, and revise our margin forecasts to adjust for a dynamic business mix, we raise our fair value estimate to $1,650 per share, from $1,420 prior, though we continue to view shares as expensive. 

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Company Profile

Business Description

MercadoLibre runs the largest e-commerce marketplace in Latin America, connecting a network of more than 132 million active buyers and 1 million active sellers across its 18-country footprint. The company also operates a host of complementary businesses, with shipping solutions (Mercado Envios), a payment and financing operation (Mercado Pago), advertisements (Mercado Clics), classifieds, and website development rounding out its arsenal. MercadoLibre generates revenue from final value fees, advertising royalties, payment processing, insertion fees, subscription fees, and interest income from consumer and small-business lending.

Contact
Pasaje Posta 4789, 6th Floor
Buenos Aires, C1430EKG, Argentina
T +54 1146408000
Sector Consumer Cyclical
Industry Internet Retail
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Cyclical
Employees 15,546

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