MercadoLibre (NASDAQ:MELI) and Zillow Group (NASDAQ:ZG) are both large-cap retail/wholesale companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, dividends, profitability, earnings and risk.
Volatility and Risk
MercadoLibre has a beta of 1.63, meaning that its stock price is 63% more volatile than the S&P 500. Comparatively, Zillow Group has a beta of 1.31, meaning that its stock price is 31% more volatile than the S&P 500.
Analyst Ratings
This is a breakdown of current recommendations and price targets for MercadoLibre and Zillow Group, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
MercadoLibre | 0 | 3 | 14 | 0 | 2.82 |
Zillow Group | 2 | 4 | 17 | 0 | 2.65 |
MercadoLibre currently has a consensus target price of $1,716.4706, indicating a potential upside of 8.31%. Zillow Group has a consensus target price of $167.96, indicating a potential upside of 13.79%. Given Zillow Group's higher possible upside, analysts plainly believe Zillow Group is more favorable than MercadoLibre.
Earnings & Valuation
This table compares MercadoLibre and Zillow Group's gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
MercadoLibre | $2.30 billion | 34.42 | $-172,000,000.00 | ($1.68) | -943.29 |
Zillow Group | $2.74 billion | 12.95 | $-305,360,000.00 | ($1.48) | -99.73 |
MercadoLibre has higher earnings, but lower revenue than Zillow Group. MercadoLibre is trading at a lower price-to-earnings ratio than Zillow Group, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
80.6% of MercadoLibre shares are held by institutional investors. Comparatively, 26.0% of Zillow Group shares are held by institutional investors. 0.4% of MercadoLibre shares are held by insiders. Comparatively, 18.5% of Zillow Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Profitability
This table compares MercadoLibre and Zillow Group's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
MercadoLibre | -0.12% | -0.22% | -0.08% |
Zillow Group | -11.54% | -9.76% | -5.70% |
Summary
MercadoLibre beats Zillow Group on 8 of the 14 factors compared between the two stocks.