MercadoLibre’s Earnings Fall Short Despite Strong Revenue Growth
MercadoLibre (MELI) reported quarterly earnings of $7.83 per share, falling below the Zacks Consensus Estimate of $11.27 per share. This shows an increase from earnings of $7.16 per share from the previous year, adjusted for non-recurring items.
This earning report marks a significant surprise of -30.52%. Just last quarter, analysts expected MercadoLibre to earn $8.72 per share; however, the company outperformed expectations with earnings of $10.48, leading to a surprise of 20.18%.
Over the past four quarters, the company has exceeded consensus EPS estimates twice. MercadoLibre, a key player in the Zacks Internet – Commerce industry, generated revenues of $5.31 billion for the quarter ending September 2024, surpassing the Zacks Consensus Estimate by 1.11%. This represents a dramatic increase from last year’s revenues of $3.76 billion. The company has beaten consensus revenue estimates all four times in the last year.
The immediate price movement of MercadoLibre’s stock will largely hinge on management’s remarks during the upcoming earnings call, as investors keenly assess future earnings expectations.
Since the start of the year, MercadoLibre shares have risen approximately 33%, significantly outperforming the S&P 500 which has seen gains of 21.2%.
What Lies Ahead for MercadoLibre?
With MercadoLibre’s current year-to-date performance outpacing the market, investors may be wondering about the stock’s future trajectory.
While there isn’t a straightforward answer, one effective way to gauge the situation is by looking closely at the company’s earnings outlook. This includes both the current consensus earnings expectations for the upcoming quarters and any recent changes in these projections.
Research indicates a strong link between short-term stock movements and trends in earnings estimate revisions. Investors can monitor these revisions independently or utilize established tools like the Zacks Rank, known for its success in leveraging earnings estimate changes.
Prior to this earnings release, the trend for MercadoLibre’s estimate revisions has been favorable. Although the outcomes of the latest earnings report could shift these estimates, the current standing leads to a Zacks Rank #2 (Buy) for the stock, indicating it is poised to outperform the market in the near term. For a comprehensive list of today’s Zacks #1 Rank (Strong Buy) stocks, click here.
In the upcoming days, it will be intriguing to watch how estimates for the next quarters and the current fiscal year evolve. The consensus EPS estimate currently stands at $9.14, with revenues projected at $5.93 billion for the next quarter and $37.70 on revenues of $20.53 billion for the ongoing fiscal year.
Additionally, investors should consider that the overall industry outlook can heavily influence stock performance. The Zacks Industry Rank places Internet – Commerce in the top 27% of over 250 Zacks industries, signifying that stocks in the top 50% tend to outperform those in the bottom by a ratio exceeding 2 to 1.
Another company in the same industry, Maplebear (CART), has yet to disclose its results for the quarter ended September 2024, with results anticipated on November 12. Maplebear, which operates the Instacart online grocery service, is expected to report quarterly earnings of $0.22 per share, reflecting a +101.1% change from last year. In the past 30 days, the consensus EPS estimate has been revised upward by 5.9%. Revenue projections for Maplebear stand at $844.24 million, marking a 10.5% increase from the previous year.
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