Key Highlights
- Capital Research Global Investors expanded its MELI holdings by 22.5% during Q4, acquiring 408,939 shares to total 2,225,031, with an approximate value of $4.48 billion.
- Hedge funds and institutional investors collectively hold 87.62% of MercadoLibre shares.
- First-quarter revenue surged 49% compared to last year, reaching $8.85 billion and exceeding projections, while earnings per share of $8.23 fell below the $8.75 forecast.
- Director Alejandro Nicolas Aguzin purchased 600 shares in May at $1,655.93 per share, expanding his stake by 12.62%.
- Wall Street maintains a Moderate Buy rating with a mean price objective of $2,255.33, despite multiple analysts reducing targets post-earnings.
MercadoLibre (MELI) stock began Friday’s session at $1,607.80, declining 1.7% and trading significantly beneath its 52-week peak of $2,645.22. The stock currently trades below both its 50-day moving average of $1,720.81 and its 200-day moving average of $1,887.84.
Capital Research Global Investors emerged as the most notable institutional player. During the fourth quarter, the investment firm expanded its MELI stake by 22.5%, acquiring an additional 408,939 shares to reach a total position of 2,225,031 shares, valued at approximately $4.48 billion. This holding represents MELI as the firm’s 24th largest investment, comprising 0.8% of its overall portfolio.
Several additional institutional players bolstered their positions throughout the same period. Hardy Reed, Rothschild Investment, Interchange Capital Partners, Cornerstone Select Advisors, and Mitchell Capital Management each implemented modest position increases. Collectively, institutional investors and hedge funds now command 87.62% ownership of the e-commerce giant.
Regarding insider transactions, Director Alejandro Nicolas Aguzin acquired 600 shares on May 22nd at a mean price of $1,655.93, investing approximately $994,000. This purchase elevated his total ownership to 5,355 shares, currently valued at slightly above $8.8 million.
First Quarter Results: Top-Line Strength, Bottom-Line Disappointment
MercadoLibre unveiled its first-quarter financial performance on May 7th. Revenue totaled $8.85 billion, climbing 49% versus the prior-year period and surpassing the analyst consensus of $8.29 billion. This represents robust growth on the top line.
Earnings per share, conversely, presented a less favorable picture. The company delivered $8.23, falling short of the $8.75 Wall Street expectation by $0.52. The comparable quarter last year produced EPS of $9.74 — marking a year-over-year decrease that garnered investor scrutiny.
Return on equity measures 29.58% while net margin registers at 6.04%. Wall Street currently projects full-year EPS of $40.97. The company’s price-to-earnings ratio stands at 42.43, accompanied by a PEG ratio of 0.99.
Wall Street Adjusts Price Objectives Following Earnings
The earnings shortfall triggered a series of price target reductions, although most analysts maintained favorable outlooks.
JPMorgan decreased its objective from $2,100 to $1,900 while maintaining a neutral stance. UBS reduced its target from $2,050 to $1,750, also neutral. Morgan Stanley trimmed from $2,600 to $2,450 but preserved its overweight recommendation. Goldman Sachs established a $2,100 price target. Daiwa downgraded from buy to hold with an $1,800 objective.
Among 18 analysts tracking the stock, one assigns a Strong Buy rating, eleven recommend Buy, five suggest Hold, and one rates it as Sell. The consensus mean price target stands at $2,255.33 — approximately 40% above MELI’s current trading level.
MercadoLibre maintains a market capitalization of $81.52 billion, a current ratio of 1.16, and a debt-to-equity ratio of 0.63. The stock’s one-year low sits at $1,495.00.
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