Latin American e-commerce and fintech company MercadoLibre (NASDAQ:MELI) will be announcing earnings results tomorrow after market close. Here’s what investors should know.
MercadoLibre beat analysts’ revenue expectations by 2.5% last quarter, reporting revenues of $5.31 billion, up 35.3% year on year. It was a mixed quarter for the company: MercadoLibre reported impressive revenue growth. On the other hand, its EBITDA and EPS missed because it ramped up investments in its credit and logistics businesses. Specifically, its higher loan originations in the quarter led to the recognition of bad debt upfront (the expected losses on the loans). It reported 60.8 million daily active users, up 20.9% year on year.
Is MercadoLibre a buy or sell going into earnings? Read our full analysis here, it’s free.
This quarter, analysts are expecting MercadoLibre’s revenue to grow 33.7% year on year to $5.89 billion, slowing from the 46.9% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $7.61 per share.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. MercadoLibre has a history of exceeding Wall Street’s expectations, beating revenue estimates every single time over the past two years by 8% on average.
Looking at MercadoLibre’s peers in the consumer internet segment, some have already reported their Q4 results, giving us a hint as to what we can expect. Etsy delivered year-on-year revenue growth of 1.2%, missing analysts’ expectations by 1.2%, and Coinbase reported revenues up 138%, topping estimates by 22%. Coinbase traded down 8% following the results.
Read our full analysis of Etsy’s results here and Coinbase’s results here.
There has been positive sentiment among investors in the consumer internet segment, with share prices up 7.7% on average over the last month. MercadoLibre is up 14.3% during the same time and is heading into earnings with an average analyst price target of $2,250 (compared to the current share price of $2,096).
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