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MercadoLibre Gains on Strong EPS Beat, Analyst Says There's 'A Lot to Like'

Stock Markets Aug 04, 2022 08:33AM ET
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© Reuters MercadoLibre Gains on Strong EPS Beat, Analyst Says There's 'A Lot to Like'

By Senad Karaahmetovic

Shares of MercadoLibre (NASDAQ:MELI) are trading higher in premarket Thursday after the company delivered strong Q2 results.

MELI reported EPS of $2.43 on sales of $2.6 billion to top the analyst consensus of $2.02 on revenue of $2.5 billion.

MercadoLibre also reported a Payment volume of $30.19 billion to crush the analyst estimate of $26.81 billion. Payment transactions also easily topped analyst estimates.

A BTIG analyst said there’s “a lot to like” in MELI’s Q2 results, including market share gains, TPV growth, and better credit margins. The analyst hiked the price target to $1,215 from $1,040.

“As was the case last quarter, MELI impressed with strong execution, delivering upside in transaction payment volumes (TPV), credit and profitability… Overall, we believe investors should have little to quibble with given market share gains while also delivering strong profitability. We view MELI as only getting stronger with each passing quarter,” the analyst said in a client note.

A Credit Suisse analyst reiterated an Outperform rating and hiked the price target to $1,470 per share from $1,430 on strong fintech and credit outperformance.

“We maintain our Outperform rating on the following: 1) take rate/monetization rise from ~16% to ~20% of GMV, and ~5% to ~6% of TPV over the next several years, 2) potential to consolidate market share amidst rising adoption of ecommerce, 3) optionality to layer on incremental sources of Payments revenue,” the analyst wrote in a research note.

MercadoLibre Gains on Strong EPS Beat, Analyst Says There's 'A Lot to Like'
 

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