I’m not sure how many folks on this board stayed invested in MercadoLibre (MELI) but the shares went parabolic today to an all-time high of $435/sh. This, along with Tesla, are some of the few names I’ve maintained outside of the appealing and fast-scaling cloud growth sector names many of us here hold. It has not disappointed.
Some data points:
-Revenue soared 63% in Q4.
-Gross merchandise volume was up 18% during the quarter.
-Total payments transactions increased 72% to 126M.
-Unique buyers were up 8%.
This 4X+ rise in 3 years (from $100/sh) has been quite an investment, and with a market cap of <$17B vs. >$800B for Amazon, I’d say they have quite a bit of opportunity given their business optionality and solid strategy. Might be worth a look for those looking for a profitable, growing stalwart investment profile.
I have been holding small position in MELI for years now…
I never felt comfortable selling MELI out of taxable account… even though I took profit in IRAs a couple of years back…
To me, MELI is one of those companies that have exponential potential… just like TWLO, SHOP and SQ have proven to be… (and in line with what AMZN has proven to be) and what I expect MDB will prove to be within a few quarters with its Atlas product.
You see the point here is this:
these businesses don’t just sell their product (or monetize their SW or service or marketplace… whatever the case may be)… they find a way to leverage (put a tax on / make profit on…) to their customers spend.
- payment processing fees in case of SQ, SHOP and even TWLO…
- usage of services i.e. voice minutes or bandwidth used by customers in case of TWLO)…
This model puts this companies on exponential trajectory unmatched by even regular SAAS business model (which itself is super charged model in nature… meaning they have recurring revenue and keep adding new products and new cutoemrs)…
MELI ofcourse has had difficulty due to BRL slump in last few quarters (vs USD) and also Venezuela crisis hitting its top and bottom line…
MELI has consistently grown revenue on fx netutral basis y/y at rate of 40% or higher for almost a decade now.
With both drag factors dissipating (BRL stable for now?? hopefully, and Venezuela essentially off the comps now), MELI has high potential to be one of those hidden growth story apparently coming out of nowhere in next few quarters.
I have been holding MELI almost two years. I really liked two things from the earnings announcement. Thing one was that they went to flat rate shipping in Brazil. That should help profitability a great deal. Second was the total payment transaction increase, 72%. That’s just tremendous. I think we just hit an inflection point. Very nice day for longs.
Long MELI 9.8%
Nice pop in MELI today; I’m also long (6% of portfolio).
Well now Q1 earnings come and whaddya know but MELI crushes it again! Congrats to all that are participating in this impressive and sustained multibagger ascent! MercadoLibre There is PLENTY of upside still to come IMHO.
MercadoLibre +13% after earnings smasher
MercadoLibre (NASDAQ:MELI) jumps 13.20% in premarket trading after toping Q1 estimates by a wide margin.
Total payment volume was up 35% to $5.6B during the quarter and for the first time ever off-platform payments processed were over $2.5B in transactions.
Gross merchandise volume was down 1.7% to $3.1B (+27% constant currency).
Items sold during the quarter were up 3.3% to 82.8M.
Worthy of note is Starrob’s post from the premium site regarding the CFO’s comments from the earnings release:
Pedro Arnt, Chief Financial Officer of MercadoLibre, Inc., commented, “I am very pleased with the results we delivered this quarter. It is encouraging to enter the new year with continued momentum in our business and to see our strategy delivering on multiple fronts in a sustainable manner. Our Marketplace business showed great resiliency, our Payments business is gaining traction in its online to offline efforts, and our Shipping efforts continue growing the size of our managed network. From a financial perspective, the 1Q’19 was a very strong quarter, as net revenues accelerated to 92.9% YoY growth on an FX neutral basis.”