MercadoLibre: The Latin America E-Commerce Giant

Apr. 25, 2017 2:37 PM ETMercadoLibre, Inc. (MELI)7 Comments
Mateo Valdivieso profile picture
Mateo Valdivieso
10 Followers

Summary

  • MercadoLibre is the leader in the e-commerce market in Latin America.
  • Growth in e-commerce sales is expected to grow to $80B by the year 2019.
  • MercadoLibre still has room for growth when compared to other e-commerce giants.

MercadoLibre (NASDAQ:MELI) is one of the largest online commerce ecosystems in Latin America. MercadoLibre's platform is designed to provide users with a complete portfolio of services to facilitate commercial transactions. They are a market leader in e-commerce in Argentina, Brazil, Chile, Colombia, Costa Rica, Ecuador, Mexico, Peru, Uruguay, and Venezuela, based on number of unique visitors and page views

MercadoLibre also operates online commerce platforms in the Dominican Republic, Honduras, Nicaragua, El Salvador, Panama, Bolivia, Guatemala, Paraguay, and Portugal. Through their platform, they provide buyers and sellers with a robust environment that fosters the development of a large e-commerce community in Latin America, a region with a population of over 610 million people and with one of the fastest-growing Internet penetration rates in the world. MercadoLibre offers technological and commercial solutions that address the distinctive cultural and geographic challenges of operating an online commerce platform in Latin America. Their services consist of six integrated e-commerce services: the MercadoLibre Marketplace, the MercadoLibre Classifieds Service, the MercadoPago Payments Solution, the MercadoLire Advertising Program, the Mercado Shops Online Webstores Solution and the MercadoEnvios Shipping Service.

Long

Current Price: $212.30

Target Price: $257.80

Market Cap: 9.39B

52-week range: $115.81-$218.75

Beta: 2.4

Average Volume: 0.385 million

D/E Ratio: .05

EBITA Margin: 23.5%

ROIC: 72.0%

ROIC/WACC: 5.35%

Source: Bloomberg

Thesis:

MercadoLibre is at the forefront of an early stage e-commerce market that has not developed as fast as Asian and U.S. e-commerce markets. MercadoLibre is the leader in e-commerce in Latin America where they provide their services to the whole region. Their developed payment services and logistics service will continue to add to their growing business as they are focused on enhancing the market place and customer experience. MercadoLibre continues to grow year over year in users. Gross merchandise value has also continued to grow. Projected growth for e-retail looks favorable - expect MercadoLibre

This article was written by

Mateo Valdivieso profile picture
10 Followers
Currently working as an Equity research analyst through Siena College, Bjorklund Fund.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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