Key Market Facts
Netflix (NASDAQ: NFLX) stock has fallen 38% over the past year, while MercadoLibre (NASDAQ: MELI) has decreased by 23%. Both companies posted disappointing quarterly results this earnings season, contributing to their decline as they underperform against a market that has risen by double digits this year. Netflix reported a significant drop in revenue growth, from 18% to 13% in Q1 and Q2, and projected an 11.7% increase for the current period. MercadoLibre, despite a 50% revenue increase, is facing margin contractions and rising credit loss provisions.
Netflix’s stock dropped 9% in the two days following its Q2 update in mid-July, while MercadoLibre’s stock slid further after its recent financial release. Investors are cautious as both companies are historically considered cheap but currently face near-term challenges.
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