Mercadolibre Inc (NASDAQ: MELI)

Sector: Consumer Cyclical Industry: Internet Retail CIK: 0001099590
Market Cap 106.40 Bn
P/B 17.11
P/E 51.23
P/S 4.06
ROIC (Qtr) 13.47
Div Yield % 0.00
Rev 1y % (Qtr) 39.48
Total Debt (Qtr) 9.88 Bn
Debt/Equity (Qtr) 1.59

About

Price action

Investment thesis

Bull case

  • Strong operating cash flow of 9.83B provides robust 1x coverage of total debt 9.88B, indicating excellent debt servicing capability and financial flexibility.
  • Strong tangible asset base of 36.41B provides 3.69x coverage of total debt 9.88B, indicating robust asset backing and low credit risk.
  • Operating cash flow of 9.83B provides strong 32.45x coverage of stock compensation 303M, indicating sustainable incentive practices.
  • Operating cash flow of 9.83B provides exceptional 62.22x coverage of interest expenses 158M, showing strong debt service capability.
  • Robust free cash flow of 8.61B exceeds capital expenditure of 1.23B by 7.03x, indicating strong organic growth funding capability.

Bear case

  • Operating cash flow of 9.83B barely covers its investment activities of (6.31B), with a coverage ratio of -1.56, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (6.31B) provide weak support for R&D spending of 2.20B, which is -2.87x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 9.20B provide limited coverage of acquisition spending of (6M), which is -1533.17x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • High receivables of 6.95B relative to inventory of 532M (13.06 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Short-term investments of 11.53B represent 2.70x of working capital 4.27B, suggesting potentially excessive financial asset allocation versus operational needs.

Consolidation Items Breakdown of Revenue (2024)

Peer comparison

Companies in the Internet Retail
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 AMZN Amazon Com Inc 2,526.56 Bn 33.03 3.65 135.42 Bn
2 BABA Alibaba Group Holding Ltd 395.87 Bn 22.47 2.79 39.55 Bn
3 PDD PDD Holdings Inc. 149.89 Bn 10.44 2.55 1.50 Bn
4 MELI Mercadolibre Inc 106.40 Bn 51.23 4.06 9.88 Bn
5 DASH DoorDash, Inc. 88.88 Bn 103.00 7.03 3.26 Bn
6 SE Sea Ltd 73.28 Bn 51.67 3.48 4.24 Bn
7 EBAY Ebay Inc 64.91 Bn 5.04 6.46 7.02 Bn
8 JD JD.com, Inc. 42.35 Bn 9.36 0.23 15.74 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.96 1.64
EV to Cash from Ops. EV/CFO 11.04 10.76
EV to Debt EV to Debt 10.98 18.39
EV to EBIT EV/EBIT 36.42 20.59
EV to EBITDA EV/EBITDA 28.08 20.75
EV to Free Cash Flow [EV/FCF] EV/FCF 12.61 16.58
EV to Market Cap EV to Market Cap 1.02 -3.15
EV to Revenue EV/Rev 4.14 -4.05
Price to Book Value [P/B] P/B 17.11 5.50
Price to Earnings [P/E] P/E 51.23 36.85
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 -93.84
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 -203.90
Dividend per Basic Share Div per Share (Qtr) 0.00 0.08
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 -3.46
Interest Coverage Int. cover (Qtr) 18.85 -1,581.43
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -66.67 -39.45
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 164.49 53.91
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 1.00
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 41.11 37.93
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 40.71 -62.59
EBIT Growth (1y) % EBIT 1y % (Qtr) 45.03 8.33
EBT Growth (1y) % EBT 1y % (Qtr) 48.55 -10.66
EPS Growth (1y) % EPS 1y % (Qtr) 44.62 13.44
FCF Growth (1y) % FCF 1y % (Qtr) 39.10 -46.02
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 33.17 23.19
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.71 1.17
Cash Payout Ratio Cash Payout (Qtr) 0.00 -0.04
Cash Ratio Cash Ratio (Qtr) 0.38 2.14
Current Ratio Curr Ratio (Qtr) 1.17 3.56
Debt to Equity Ratio Debt/Equity (Qtr) 1.59 0.52
Interest Cover Ratio Int Coverage (Qtr) 18.85 -1,581.43
Times Interest Earned Times Interest Earned (Qtr) 18.85 -1,581.43
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 14.20 4.40
EBIT Margin % EBIT Margin % (Qtr) 11.37 -36.99
EBT Margin % EBT Margin % (Qtr) 10.77 -40.80
Gross Margin % Gross Margin % (Qtr) 45.10 44.74
Net Profit Margin % Net Margin % (Qtr) 7.90 -40.62