MercadoLibre is Thursday's IBD Stock Of The Day, as the e-commerce giant and Amazon.com rival posted better-than-expected Q2 financials late Wednesday. MELI stock soared Thursday.
MercadoLibre is the largest e-commerce company in Central and South America, where it rivals industry behemoth Amazon. It's also a significant payments player.
After the market closed Wednesday, MercadoLibre reported that profit ballooned 112% to $5.16 per share in the second quarter. Meanwhile, revenue grew 31% to $3.42 billion. Operating income increased 124% to $558 million, while its operating margin was 16.3% vs. 9.6% a year ago, boosted by operations in Brazil and Mexico.
The Uruguay-based company also reported that gross merchandise volume, considered a key e-commerce metric, grew 47% to $10.5 billion. MercadoLibre said this is the first time GMV has surpassed $10 billion.
MELI's fintech revenue grew 48% to $1.5 billion. The company said this was driven by 18% growth in active Mercado Pago users. MercadoLibre's total payment volume jumped 97% to $42 billion.
MercadoLibre operates in 18 countries and generates most of its sales in Argentina, Brazil and Mexico. Its largest market is Brazil, which made up 54% of its revenue in 2022. In Q2, MELI said Brazil and Mexico stood out as the markets with the fastest profit growth.
MELI Stock
MELI stock jumped 10% to 1,282 in higher-than-average volume during Thursday's market trade. That put shares in a buy zone after decisively retaking their 50-day moving average.
The stock is in an 11-week consolidation, showing a traditional entry at 1,365.64.
Morgan Stanley analyst Andrew Ruben wrote Thursday that the firm sees MELI stock in a "position of strength including around share gain and marketplace monetization."
Ruben has an overweight rating on the shares and a price target of 1,770. Meanwhile, Credit Suisse upped its MELI stock price target Thursday to 1,780, up from 1,760.
MercadoLibre stock has gained around 54% since the beginning of the year, outperforming the S&P 500's 17.3% jump.
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