MercadoLibre's Q3 Earnings Miss Estimates, Revenues Rise Y/Y

MercadoLibre MELI reported third-quarter 2024 earnings of $7.83 per share, which missed the Zacks Consensus Estimate by 30.52% but increased 9.4% year over year.

Revenues rose 35% on a year-over-year basis (103% on a FX-neutral basis) to $5.3 billion. The top line surpassed the Zacks Consensus Estimate by 1.11%.

Total revenues were driven by accelerating commerce and fintech revenues, which grew 48% and 21% year over year to $2.12 billion and $1.79 billion, respectively.

Revenues from MELI’s advertising services grew 37% on a year-over-year basis and were equivalent to almost 2% of gross merchandise volume (GMV) at the end of the third quarter.

Increasing total payments volume (TPV), courtesy of the robust Mercado Pago, aided the company. MercadoLibre’s rising GMV remained another positive. Strong momentum across Brazil and Mexico also contributed well to the reported results.

In the third quarter, MELI opened six new fulfillment senators, five in Brazil and one in Mexico.

MercadoLibre, Inc. Price, Consensus and EPS Surprise

MercadoLibre, Inc. price-consensus-eps-surprise-chart | MercadoLibre, Inc. Quote

Quarter in Detail

Brazil: Net revenues in the third quarter came in at $2.91 billion (54.8% of the total revenues), rising 41.2% year over year.

Argentina: The market generated revenues of $1.03 billion (19.4% of the top line), which grew 13.5% year over year.

Mexico: Net revenues in the reported quarter were $1.14 billion (21.6% of the total revenues), which soared 44% year over year.

Other countries: The markets generated revenues of $221 million (4.2% of the total revenues), reflecting an increase of 39% on a year-over-year basis.

Key Metrics

GMV of $12.9 billion jumped 71.2% on an FX-neutral basis year over year. The figure beat the consensus mark by 0.91%.

The number of successful items sold was 456 million, up 27.7% year over year. The number of successful items shipped rose 29.4% year over year to 453 million.

TPV surged 72.7% year over year on a FX-neutral basis to $50.6 billion. This was driven by the strong performance of Mercado Pago. The figure beat the Zacks Consensus Estimate by 2.96%.
Total payment transactions increased 47.5% year over year to $2.93 billion.

Fintech monthly active users totaled 56 million, up 33.3% year over year.

Operating Details

For the third quarter, the gross margin was 45.9%, down from 53.6% in the year-ago-period.

Operating expenses were $1.88 billion, which increased 43.7% year over year. As a percentage of revenues, the figure expanded 60 bps year over year to 35.4% in the reported quarter.

The operating margin was 10.5%, down from 20.9% in the year-ago-period.

Balance Sheet

As of Sept. 30, 2024, cash and cash equivalents were $2.16 billion, down from $2.82 billion as of June 30, 2024.

Short-term investments were $1.1 billion as of Sept. 30, 2024. Net debt came in at $1.9 billion at the end of the quarter.

Zacks Rank & Other Stocks to Consider

Currently, MercadoLibre carries a Zacks Rank #2 (Buy) at present.

Some other top-ranked stocks in the broader retail-wholesale sector are Alibaba BABA, Boot Barn BOOT and Brinker International EAT. BABA, BOOT and EAT sport a Zacks Rank #1 (Strong buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of BABA have gained 24.8% in the year-to-date period. The long-term earnings growth rate for Alibaba is currently estimated at 7.66%.

Shares of Boot Barn have surged 65.7% in the year-to-date period. The long-term earnings growth rate for BOOT is currently projected at 12.99%.

Brinker International shares have gained 168.3% in the year-to-date period. The long-term earnings growth rate for EAT is currently anticipated at 32.44%.

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