The MercadoLibre stock price (MELI), which has been on a steady upward trend for the last few weeks, is now moving sideways as the rally that was so strong recently takes a break. It has fallen by approximately 5% since its peak of $2,160 reached on September 26.
MELI is the largest e-commerce firm in Latin America. It has had a stellar year.
MercadoLibre is growing its business
MercadoLibre is one of the largest players in the ecommerce sector with a total market capitalization of more than $104 billion.
This was achieved by the company targeting one of world’s largest economies. Latin America is home to over 650 millions people, which is almost twice as many as the United States.
Over the last few years, its GDP has increased to over $6.7 trillion. Brazil is the main driver of this performance, as it’s the 11th largest economy in the entire world. Economists think that this region’s performance will be good for a long time.
MercadoLibre’s stock has performed well due to its dominance in the area and growing market share. MELI is the only e-commerce company in the area that has the same infrastructure as MELI.
It has done very well in replicating popular ecommerce firms like Amazon, Alibaba and Coupang. The companies have expanded their service. Envios is its new logistics company, offering solutions in countries such as Brazil and Colombia.
Meli Air is a new airline that MercadoLibre has launched, with planes serving countries such as Brazil and Mexico.
It has also become a leader in the financial industry. Through this, it provides solutions such as pre-paid card, consumer and merchant credit, saving and investment solutions and cryptocurrency solutions. Mercado Credito offers millions of loans.
These solutions made MercadoLibre a company that is growing fast. Its annual revenue has risen from $2.29 Billion in 2019 to $14.44 billion. The 554% increase is faster than any other company.
Read More: MercadoLibre has reached a new record: is it still a good buy?
MercadoLibre earnings ahead
This week, MELI will publish its financial results and the stock price of MELI is sure to be on everyone’s lips. MELI’s most recent financial results revealed that Gross Merchandise Volume (GMV), which measures the value of its products, increased by 20 percent to $12.6 billion. It sold 421 different items on its platform.
Credit portfolio grew by 51%, to $4.9 Billion.
In the fourth quarter, the company’s net revenue increased by 42 percent to $5 billion. The net profit also rose, reaching $531 millions. Its adjusted free cashflow rose 368%, to $678 millions.
Analysts anticipate that MercadoLibre will continue to do well during the third quarter. Analysts expect a revenue of $5.27 billion on average, which is much more than $3.76 billion in the same quarter in 2023.
Analysts expect MELI to have revenue of over $17 billion for the entire year. This is a 40% growth from last year. The growth of a company founded over 20 years ago is impressive.
MELI is expected to have a higher upside over the long term. Analysts expect that MELI’s stock price will increase to $2.365 from the current $2.055.
Read about the MercadoLibre Stock Analysis: MELI at Risk ahead of Earnings
MercadoLibre stock price analysis
TradingView MELI Chart
Weekly chart of MELI shows that it has had a bullish run for the last few months. The cup-and-handle pattern is a bullish market sign. Recent consolidation occurs in the handle area.
MercadoLibre’s stock is still above its 50-week and the 200-week Exponential moving averages (EMA), indicating further upside.
The shares are likely to have a bullish break out. Next, we will be watching the level of $2,200. This is up 7.6% over the current price.
The post MercadoLibre stock (MELI), forms a bullish trend ahead of earnings, may be updated as new information becomes available
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