Seven analysts have raised their EPS estimates for this tech company in the past 30 days.
MercadoLibre, Inc. (MELI)
From Global Investing
MercadoLibre, Inc. (MELI) wowed markets after hours yesterday with a nifty beat. Its Q4 revenues rose by 61.8% in constant currencies y/y to $428 mn. Its total payments booked on- and off-line rose 68.5% to $5.3 bn also in constant FX. In dollars, the rise was 22.1%, not bad either thanks to quadrupled “Mobile Wallet: payments rising in triple digits in key markets Brazil, Mexico, and Argentina. Its gross merchandise sales volume grew by only 17.6% to $3.2 bn, but was down in bucks by 10.6%. This resulted from flat pricing in Brazil for cheaper items and removal of ones listed for less than Reais 6 to favor bigger ticket ones.
Now for the bad news. Because of accounting changes to adapt ASC 606, none of the full year numbers are truly comparable although the differences do not affect operating income or net loss. Full year net revenues as reported, not as recast, rose to $1.439,7 bn from prior year’s $1.216,5 bn. Under the new standard the rise was bigger, to $1.864,5 bn from $1.398,1 bn in 2017.
This also juggled the shares between the major countries, but Mexico is still a work in progress, despite help from an appreciating Mexican peso vs the Argentina one. MELI also borrows in dollars. But it lost $6.8 mn in Q4 2018 in Mexico. Venezuela was a black hole.
Brazil is the big kahuna for MELI, 2x its homeland sales. Expenses were down 23.3% to $205.8 mn. This means losses were booked in 2018 but they were tiny, 0.2% of revenues, compared to 18% in Q4 2017. In Q4, the loss was $2.3 mn, about a nickel/sh. Also helping the MELI bottom line was a 61% y/y rise in Q4 interest income, thanks to greater stability and no repeat of 2017’s Argentine peso devaluation against the greenback.
Today, MELI stock topped $437.5, up 18.4%, close to Goldman Sachs’ $438 target. It is at an all-time and a full-year high. It was rated outperform by Credit Suisse and buy by Bank of America today with a target price of $450. Nancy’s Note: The shares have zoomed through the target, and Vivian continues to rate them a ‘Buy’. The 16 analysts following the company average 12-month price forecasts with a median target of 441.00, a high estimate of 558.00 and a low estimate of 340.00.
Vivian Lewis, Global Investing, www.global-investing.com, 212-758-9480, February 27, 2019