S&P 500   5,137.08
DOW   39,087.38
QQQ   445.61
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S&P 500   5,137.08
DOW   39,087.38
QQQ   445.61
Lawyers who successfully argued Musk pay package was illegal seek $5.6 billion in Tesla stock
Critical asset just had biggest fall on record (Ad)
Peace, music and memories: As the 1960s fade, historians scramble to capture Woodstock's voices
Sports analytics may be outnumbered when it comes to artificial intelligence
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
In Senegal's capital, Nicaragua is a hot ticket among travel agents as migrants try to reach US
California authorizes expansion of Waymo's driverless car services to LA, SF peninsula
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
Norway's hospitalized king gets a pacemaker in Malaysia after falling ill during vacation
College athletes will need school approval for NIL deals under bill passed by Utah Legislature
S&P 500   5,137.08
DOW   39,087.38
QQQ   445.61
Lawyers who successfully argued Musk pay package was illegal seek $5.6 billion in Tesla stock
Critical asset just had biggest fall on record (Ad)
Peace, music and memories: As the 1960s fade, historians scramble to capture Woodstock's voices
Sports analytics may be outnumbered when it comes to artificial intelligence
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
In Senegal's capital, Nicaragua is a hot ticket among travel agents as migrants try to reach US
California authorizes expansion of Waymo's driverless car services to LA, SF peninsula
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
Norway's hospitalized king gets a pacemaker in Malaysia after falling ill during vacation
College athletes will need school approval for NIL deals under bill passed by Utah Legislature
S&P 500   5,137.08
DOW   39,087.38
QQQ   445.61
Lawyers who successfully argued Musk pay package was illegal seek $5.6 billion in Tesla stock
Critical asset just had biggest fall on record (Ad)
Peace, music and memories: As the 1960s fade, historians scramble to capture Woodstock's voices
Sports analytics may be outnumbered when it comes to artificial intelligence
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
In Senegal's capital, Nicaragua is a hot ticket among travel agents as migrants try to reach US
California authorizes expansion of Waymo's driverless car services to LA, SF peninsula
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
Norway's hospitalized king gets a pacemaker in Malaysia after falling ill during vacation
College athletes will need school approval for NIL deals under bill passed by Utah Legislature

MercadoLibre up 28% as Latin American ecommerce poised for growth

MercadoLibre stock price

Key Points

  • MercadoLibre soared 28% in November, hitting its highest levels since November 2021.
  • The stock's chart shows a cup-with-handle breakout at $1,398.59 on November 14, with the stock rallying since then.
  • Wall Street anticipates a bullish year for MercadoLibre, eyeing 134% earnings growth to $22.36 per share.
  • 5 stocks we like better than MercadoLibre

Uruguay-based e-commerce platform MercadoLibre Inc. NASDAQ: MELI is up 28% in November, reaching its best levels since November 2021. 

The MercadoLibre chart shows a November 14 cup-with-handle breakout above $1398.59. The stock has been in rally mode since then, and is currently extended 14% from its buy point, which means a pullback with moving-average support could offer the next buy opportunity. 

Wall Street has bullish expectations for this stock, eyeing earnings growth of 134% this year, to $22.36 per share. 

Next year, earnings are expected to rise by another 48%, to $33.13 a share.

Breaking Black Friday sales records

MercadoLibre stock rallied 4.15% in heavy volume after the company joined Shopify Inc. NYSE: SHOP in reporting record-breaking Black Friday sales. 

The company said gross sales grew 80% over the year-earlier period on Thursday, November 23 and Friday, November 24. 

The November performance marked an increase of 39% versus November of 2022. 

MercadoLibre cited other highlights, including: 

  • The sale of electronics, especially cell phones, notebooks and TVs, grew 140%. 
  • The total average number of items sold per day is 1.8 million, but on November 23 alone, this volume peaked at 2.8 million items surpassing last year's Black Friday even before Friday. 
  • To reach that record, Mercado Libre invested in logistics, hiring 7,200 temporary employees and maintaining fast delivery times even at the sales peak.

“We are also succeeding in our objective of sustaining growth records without sacrificing the company's margins”, said Fernando Yunes, senior vice president and leader of Mercado Libre in Brazil, in a statement.

Analysts' bullish view

MarketBeat’s MercadoLibre analyst forecasts show a consensus view of “moderate buy” with a price target of $1,706.07, an upside of 7.36%. 


That’s not a bad price target, but it indicates the potential for the stock to pull back before it resumes its rally. The fast uptrend recently has put the stock 5.8% above its 10-day moving average.

The stock has other solid attributes, including a 29% return on equity, indicating effective use of shareholder equity to generate profits. 

There are some reasons to use caution, however. The stock’s price-to-earnings ratio is 82, a particularly frothy level. 

Investors willing to pay up

A high P/E isn’t necessarily a bad thing. It indicates that investors are willing to pay a premium for a company's future earnings, suggesting high growth expectations.

MercadoLibre is tracked with other tech stocks specializing in online retail. Industry peers include Amazon.com NASDAQ: AMZN and Alibaba Group Holding Ltd. NYSE: BABA

Amazon’s price performance has been excellent since late October, and MercadoLibre is outpacing Amazon by a small margin. 

The Alibaba chart shows the stock has been a poor performer this year, and is down significantly since its October 2020 high. 

MercadoLibre’s business model differs from Amazon’s, in that it operates not only an online marketplace, but also a financing unit and a digital advertising arm. 

Fintech unit expanding

The company has been expanding its credit and payment services. Its  Mercado Pago fintech unit operates a digital wallet service that’s popular with its Latin American customers. It also allows transactions outside of the MercadoLibre platform.  

Overall, Latin American large-cap stocks have performed well throughout this year, posting the same August through October declines as U.S. stocks. 

Analysts have been bullish on Latin America this year. According to a July report from researcher Americas Market Intelligence, the region’s e-commerce business is expected to see 22% growth in volume between 2023 and 2026, valued at more than $700 billion.

That suggests that digital payments will increase alongside purchases. In addition, the Latin American digital advertising market is growing at a rapid pace.

Stock split in the cards?

With a stock price in the quadruple digits, it wouldn’t be surprising to see a split in the not-so-distant future. 

A high-priced stock may split to make shares more affordable for a broader range of investors. By reducing the stock price and increasing the number of shares outstanding, a stock split can improve its liquidity and attract a larger investor base without harming its overall market value.

→ This is the #1 Stock to Buy for the AI Tidal Wave (From Chaikin Analytics) (Ad)

Should you invest $1,000 in MercadoLibre right now?

Before you consider MercadoLibre, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and MercadoLibre wasn't on the list.

While MercadoLibre currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
MercadoLibre (MELI)
4.7324 of 5 stars
$1,612.75+1.1%N/A82.54Moderate Buy$1,815.00
Alibaba Group (BABA)
4.0907 of 5 stars
$74.62+0.8%1.31%13.77Moderate Buy$115.44
Amazon.com (AMZN)
4.8911 of 5 stars
$178.22+0.8%N/A61.46Buy$197.95
Shopify (SHOP)
4.0952 of 5 stars
$76.59+0.3%N/A851.09Hold$76.42
Compare These Stocks  Add These Stocks to My Watchlist 

Kate Stalter

About Kate Stalter

  • stalterkate@gmail.com

Contributing Author

Retirement, Asset Allocation, and Tax Strategies

Experience

Kate Stalter has been a contributing writer for MarketBeat since 2021.

Additional Experience

Series 65-licensed investment advisor, financial advisor, Blue Marlin Advisors; investment columnist for Forbes, U.S. News & World Report

Areas of Expertise

Asset allocation, technical and fundamental analysis, retirement strategies, income generation, risk management, sector and industry analysis

Education

Bachelor of Arts, Saint Mary’s College, Notre Dame, Indiana; Master of Business Adminstration, Kellogg School of Management at Northwestern University

Past Experience

Founder, financial advisor for Better Money Decisions; editor, stock trading instructor for Investor’s Business Daily; columnist, podcast host, video host for MoneyShow.com; contributor for Morningstar magazine


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