E-commerce

MercadoLibre Smashes Q2 Earnings Expectations: Should I Buy?

While e-commerce companies across the board are having a difficult time replicating 2020’s outsized performance, one business stands out.

2020 was the year of the e-commerce stock. People were stuck at home, forced to shop online, and thus, industry growth accelerated rapidly. 

Now, however, growth is slowing as the effect of vaccinations begins to kick in, and e-commerce stocks are feeling the pinch from investors. All except one it seems. 

How is MercadoLibre doing? 

Pretty good. While Amazon (last week), and Etsy (last night) both experienced investor backlash following slowing year-over-year growth in Q2, MercadoLibre (NASDAQ: MELI) appears to have knocked it out of the park. 

Here are just some of the highlights from last night’s earnings call: 

  • Net Revenues of $1.7 billion, up 102.6% YoY.
  • $17.5 billion Total Payment Volume, up 72% YoY.
  • $7 billion Gross Merchandise Volume, up 46% YoY.
  • Unique active users grew by 47.4% YoY, reaching 75.9 million.

To sum up: the company is still posting triple-digit revenue growth a year on from possibly the biggest era of growth e-commerce ever had. 

And much of it comes down to the company’s diversification into other industries such as financial services and logistics. MercadoLibre has made itself the dominant force in Latin America for its logistics network (MercadoEnvios), payment solutions (MercadoPago), and credit lines (MercadoCredito). 

In CFO Pedro Arnt’s own words:

“This strong performance builds on the solid first quarter we had this year. We believe that our business is showing tremendous momentum despite immense volatility in our key markets due to the frequent closing of physical retail across Latin America. I am proud to see the consistent execution of our plans while prioritizing innovation, speed of execution and user experience, all elements that are at the core of our corporate DNA.”

In a continent that’s population is roughly double the U.S., with internet penetration on the rise, there is still a massive growth opportunity for MercadoLibre. Is this one for investors to watch?

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MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here