What's in the Cards for MercadoLibre's (MELI) Q3 Earnings?

MercadoLibre (NASDAQ:MELI), Inc. MELI is set to report third-quarter 2021 results on Nov 4.

For the third quarter, the Zacks Consensus Estimate for sales is pegged at $1.84 billion, indicating growth of 64.9% from the prior-year quarter’s reported figure.

The consensus mark for earnings is pegged at $1.27 per share, reflecting a massive jump from 28 cents of earning per share reported in the year-ago quarter. Further, the estimate has been unchanged over the past 30 days.

Factors to Note

MercadoLibre’s efforts to bolster the e-commerce business by promoting branding and loyalty are expected to have driven growth in its unique buyer base in the third quarter.

Strengthening shipping services are expected to have helped the company deliver an enhanced shopping experience to customers in the quarter to be reported. It is likely to have contributed to shipment growth via MercadoEnvios in the quarter under review.

Strong investments in MercadoLibre’s logistics business are expected to have favored the delivery system’s performance in the to-be-reported quarter. Further, expanding managed logistics network is anticipated to have benefited the third-quarter performance of the business.

The company’s expanding online-to-offline offerings are likely to get reflected in the to-be-reported quarter’s results.

Its growing initiatives toward strengthening the fintech business are expected to have driven the total payment volumes in the to-be-reported quarter. Strength across online payment merchant service and online wallet is anticipated to have benefited the company in the quarter under review.

MercadoLibre’s solid momentum across the marketplace and non-marketplace businesses is expected to get reflected in third-quarter results.

However, increasing warehousing costs of managed network and expenses related to infrastructure transition on public clouds are likely to have impacted the company’s profitability in the quarter under review.

Mounting interest accrual on convertible bonds along with headwinds related to foreign exchange fluctuations is anticipated to have been major concerns.

The impacts of rising competitive pressure from e-commerce giants are expected to get reflected in the third-quarter results.

What Our Model Says

Our proven model doesn’t conclusively predict an earnings beat for MercadoLibre this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

MercadoLibre has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell).

Stocks to Consider

Here are some stocks that you may also consider, as our model shows that these have the right combination of elements to beat on earnings this season.

Applied Materials (NASDAQ:AMAT) AMAT has an Earnings ESP of +0.52% and a Zacks Rank of 2 at present.

HP Inc (NYSE:HPQ). HPQ has an Earnings ESP of +1.89% and it currently sports a Zacks Rank of 1.

NetApp (NASDAQ:NTAP), Inc. NTAP has an Earnings ESP of +3.70% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

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