Mercadolibre Profitability Analysis

MELI
 Stock
  

USD 659.95  23.08  3.62%   

For Mercadolibre profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Mercadolibre to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Mercadolibre utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Mercadolibre's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Mercadolibre over time as well as its relative position and ranking within its peers. Additionally, see Stocks Correlation.
  
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The current Price to Sales Ratio is estimated to increase to 11.33. The current Return on Sales is estimated to increase to 0.07. Mercadolibre Net Income Common Stock is most likely to decrease significantly in the upcoming years. The last year's value of Net Income Common Stock was reported at 83.3 Million. The current Operating Income is estimated to increase to about 475.5 M, while Accumulated Other Comprehensive Income is projected to decrease to (528.6 M).

Mercadolibre Revenues

7.63 Billion

Share
Is Mercadolibre's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Mercadolibre. If investors know Mercadolibre will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Mercadolibre listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth YOY
5.86
Market Capitalization
33.2 B
Quarterly Revenue Growth YOY
0.63
Return On Assets
0.0383
Return On Equity
0.23
The market value of Mercadolibre is measured differently than its book value, which is the value of Mercadolibre that is recorded on the company's balance sheet. Investors also form their own opinion of Mercadolibre's value that differs from its market value or its book value, called intrinsic value, which is Mercadolibre's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Mercadolibre's market value can be influenced by many factors that don't directly affect Mercadolibre's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Mercadolibre's value and its price as these two are different measures arrived at by different means. Investors typically determine Mercadolibre value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Mercadolibre's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

Mercadolibre Cash Flow from Operations vs. Cash and Equivalents Fundamental Analysis

Comparative valuation techniques use various fundamental indicators to help in determining Mercadolibre's current stock value. Our valuation model uses many indicators to compare Mercadolibre value to that of its competitors to determine the firm's financial worth.
Mercadolibre is considered to be number one stock in cash and equivalents category among related companies. It is considered to be number one stock in cash flow from operations category among related companies making about  0.49  of Cash Flow from Operations per Cash and Equivalents. The ratio of Cash and Equivalents to Cash Flow from Operations for Mercadolibre is roughly  2.05 . Mercadolibre Cash and Equivalents is most likely to increase significantly in the upcoming years. The last year's value of Cash and Equivalents was reported at 3.65 Billion. Comparative valuation analysis is a catch-all model that can be used if you cannot value Mercadolibre by discounting back its dividends or cash flows. This model doesn't attempt to find an intrinsic value for Mercadolibre's Stock . Still, instead, it compares the stock's price multiples to a benchmark or nearest competition to determine if the stock is relatively undervalued or overvalued. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Mercadolibre's earnings, one of the primary drivers of an investment's value.

Mercadolibre Cash Flow from Operations vs. Cash and Equivalents

Cash or Cash Equivalents are the most liquid of all assets found on the company's balance sheet. It is used in calculating many of the firm's liquidity ratios and is a good indicator of the overall financial health of a company. Companies with a lot of cash are usually attractive takeover targets. Cash Equivalents are balance sheet items that are typically reported using currency printed on notes.
Mercadolibre 
Cash 
 = 
Bank Deposits 
+  
Liquidities 
2.04 B
Cash equivalents represent current assets that are easily convertible to cash such as short term bonds, savings account, money market funds, or certificate of deposits (CDs). One of the important consideration companies make when classifying assets as cash equivalent is that investments they report on their balance sheets under current assets should have almost no risk of change in value over the next few months (usually three months).
Operating Cash Flow reveals the quality of a company's reported earnings and is calculated by deducting company's income taxes from earnings before interest, taxes, and depreciation (EBITDA). In other words, Operating Cash Flow refers to the amount of cash a firm generates from the sales or products or from rendering services. Operating Cash Flow typically excludes costs associated with long-term investments or investment in marketable securities and is usually used by investors or analysts to check on the quality of a company's earnings.
Mercadolibre 
Operating Cash Flow 
 = 
EBITDA 
-  
Taxes 
997.04 M
Operating Cash Flow shows the difference between reported income and actual cash flows of the company. If a firm does not have enough cash or cash equivalents to cover its current liabilities, then both investors and management should be concerned about the company having enough liquid resources to meet current and long term debt obligations.

Mercadolibre Cash Flow from Operations Comparison

Mercadolibre is currently under evaluation in cash flow from operations category among related companies.

Mercadolibre Profitability Projections

The most important aspect of a successful company is its ability to generate a profit. For investors in Mercadolibre, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Mercadolibre will eventually generate negative long term returns. The profitability progress is the general direction of Mercadolibre's change in net profit over the period of time. It can combine multiple indicators of Mercadolibre, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
Last ReportedProjected for 2022
Accumulated Other Comprehensive Income-515 M-528.6 M
Consolidated Income83.3 M89.9 M
Net Income83.3 M89.9 M
Net Income Common Stock83.3 M89.9 M
Net Income to Non Controlling Interests82.8 K73.4 K
Operating Income440.7 M475.5 M
Income Tax Expense148.8 M160.5 M
Net Income Per Employee2.8 K2.9 K
MercadoLibre, Inc. operates online commerce platforms in Latin America. MercadoLibre, Inc. was incorporated in 1999 and is headquartered in Montevideo, Uruguay. Mercadolibre operates under Internet Retail classification in the United States and is traded on NASDAQ Exchange. It employs 29957 people.

Mercadolibre Profitability Driver Comparison

Profitability drivers are factors that can directly affect your investment outlook on Mercadolibre. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Mercadolibre position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Mercadolibre's important profitability drivers and their relationship over time.

Mercadolibre Profitability Trends

Mercadolibre profitability trend refers to the progression of profit or loss within a business. An upward trend means that Mercadolibre's profit has generally increased over time, and a downward profitability trend means profits are declining. Recognizing problems early in profitability trends allows investors to address revenue and cost issues in advance. Investors and analysts usually monitor three types of profitability trends: gross, operating, and net. Gross profit is the difference between revenue and costs of goods sold. Operating profit is Mercadolibre's gross profit minus its overhead. After you account for other unusual revenue, expenses, and costs, you get net profit. Gross profit trends are often a good indicator of future profitability. If you have high gross profit margins, you have a better chance to cover overhead and make money.

Mercadolibre Profitability Drivers Correlations

One of the toughest challenges investors face today is learning how to quickly synthesize and read into endless financial statements and information provided by the company, SEC reporting, and various external parties. Understanding the correlation between Mercadolibre different financial indicators related to revenue and profit generation helps investors identify and prioritize their investing strategies towards Mercadolibre in a much-optimized way. Analyzing correlations between profit drivers that are directly associated with dollar figures is the most effective way to break down Mercadolibre's future profitability.

Use Mercadolibre in pair-trading

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Mercadolibre position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Mercadolibre will appreciate offsetting losses from the drop in the long position's value.

Mercadolibre Pair Trading

Mercadolibre Pair Trading Analysis

The ability to find closely correlated positions to Mercadolibre could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Mercadolibre when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Mercadolibre - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Mercadolibre to buy it.
The correlation of Mercadolibre is a statistical measure of how it moves in relation to other equities. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Mercadolibre moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Mercadolibre moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Mercadolibre can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching

Use Investing Themes to Complement your Mercadolibre position

In addition to having Mercadolibre in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.

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Aircraft
Aircraft Theme
Fama and French investing themes focus on testing asset pricing under different economic assumptions. The Aircraft theme has 38 constituents.
You can either use a buy-and-hold strategy to lock in the entire theme or actively trade it to take advantage of the short-term price volatility of individual constituents. Macroaxis can help you discover thousands of investment opportunities in different asset classes. In addition, you can partner with us for reliable portfolio optimization as you plan to utilize Aircraft Theme or any other thematic opportunities.
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Additionally, see Stocks Correlation. Note that the Mercadolibre information on this page should be used as a complementary analysis to other Mercadolibre's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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To fully project Mercadolibre's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Mercadolibre at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Mercadolibre's income statement, its balance sheet, and the statement of cash flows.
Potential Mercadolibre investors and stakeholders can use historical trends found within financial statements to determine how well the company is positioned for the future. Although Mercadolibre investors may work on each financial statement separately, they are all related. The changes in Mercadolibre's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Mercadolibre's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages.