Buy Signal on MercadoLibre (MELI-US)
MercadoLibre is a $ 80.5 Bn market cap, which enables commerce through its marketplace platform in Latin America, designed to provide users with a portfolio of services to facilitate commercial transactions. Its geographic segments are Brazil, Argentina, Mexico, Venezuela and Other Countries (which includes Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Panama, Peru, Portugal, Guatemala, Bolivia, Paraguay, Uruguay and the United States of America).
It also operates online commerce platforms in the Dominican Republic, Honduras, Nicaragua, Salvador, Panama, Bolivia, Guatemala, Paraguay and Portugal. It offers an ecosystem of six integrated e-commerce services: the MercadoLibre Marketplace, the MercadoLibre Classifieds Service, the MercadoPago payments solution, the MercadoLibre advertising program, the MercadoShops online Webstores solution and the MercadoEnvios shipping service.
MercadoLibre's growth is tied to Latin America's growth in digital payments and also Internet adoption. The company successfully leverages its marketplace and popularity to offer digital payment solutions in Latin America.In contrast to its competitors, MercadoLibre was built within Latin America's economy, which gives it a major advantage.
The company delivers impressive revenue growth. In 2021, revenue is expected to reach $ 6.3 Bn (+59% yoy) and $8.7Bn in 2022 (+39% yoy), while the EBITDA margin is still a mere single digit (5.8% in 2021) but is expected to increase swiftly (to 10% in 2023). The EPS could be positive for the first time in 2021 ($0.04) and to increase dramatically thereafter.
Short term catalyst : New wave of outbreak, margins ramp up.
This signal looks consistent with the US Internet sector in Major Bullish Trend