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- 📈 $MELI: Up 42% -- Can It Continue?
📈 $MELI: Up 42% -- Can It Continue?
MELI's Q1 2024 results highlight its dominance in Latin American e-commerce and fintech, with strong revenue and user growth. 📈🛍️
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MELI: MELI $1643.40
This week, we're putting the spotlight on MercadoLibre (MELI), the e-commerce and fintech powerhouse of Latin America.
While MELI's stock price saw a small dip recently, the bigger picture is much more exciting. The company's shares jumped over 7% after it released impressive results for the first quarter of 2024.
Let's dive into what's driving this Latin American tech giant's success and why analysts are increasingly bullish on its prospects.
Smashing Expectations in Q1
MercadoLibre blew past Wall Street's expectations in Q1 2024, showcasing its dominance in the Latin American e-commerce and fintech space. Revenue surged 42.7% year-over-year to $4.33 billion, beating analyst estimates by 12.1%. Earnings per share (EPS) hit $6.78, a 14% beat and a 71.1% increase from the previous year. Gross Merchandise Volume (GMV) reached $13.5 billion, exceeding expectations of $12.4 billion. These results highlight MELI's ability to capitalize on the growing digital trends in Latin America, with both its e-commerce and fintech segments showing strong growth and performance. The company's success is driven by increasing user engagement, with daily active users growing an impressive 49.5% year-over-year to reach 145 million. Additional Reading |  |
Digital Payment Growth
While MELI started as an e-commerce platform, its fintech arm, Mercado Pago, is becoming a major growth driver. Total Payment Volume (TPV) skyrocketed to $56.5 billion, up 154% year-over-year. Mercado Pago users increased 38% to 49 million, while assets under management grew by an impressive 90% year-over-year. The company's push into financial services is paying off, with credit offerings and digital wallets gaining traction across Latin America. This diversification not only boosts revenue but also strengthens MELI's ecosystem, making it harder for competitors to encroach on its territory. The success of Mercado Pago is particularly noteworthy as it now accounts for more than half of the company's total earnings and cash flow. Additional Reading |  |
Expanding Advertising Business
MELI is also making significant strides in its advertising business. Ad revenue grew 64% year-over-year, now accounting for 1.9% of GMV, up from 1.4% in the same quarter last year. The company added 50,000 new advertisers to its platform in 2023, signaling strong demand for its advertising solutions. This high-margin revenue stream has plenty of room for growth, potentially following in the footsteps of Amazon's highly successful advertising business. As MELI's user base grows, so does the potential for its advertising platform. The company's ability to leverage its vast amounts of user data and shopping behavior insights makes its ad platform increasingly attractive to advertisers looking to reach Latin American consumers. Additional Reading |  |
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Major Market News
Source: DALL-E
Wednesday, July 3rd - ADP Employment Report
What: The ADP National Employment Report provides a monthly snapshot of U.S. nonfarm private sector employment based on actual transactional payroll data.
Impact: This report is closely watched as a precursor to the official government employment report. The June report showing 170,000 new jobs, above the forecast of 152,000, indicates continued strength in the job market.
Source: ADP Research Institute
Wednesday, July 3rd - ISM Services Index
What: The Institute for Supply Management's Services Index is a monthly survey of purchasing and supply executives in over 400 non-manufacturing firms. It provides insights into business activity, new orders, employment, and supplier deliveries in the services sector.
Impact: The services sector accounts for a significant portion of the U.S. economy. The June reading of 52.5%, while lower than the previous month's 53.8%, still indicates expansion (above 50%).
Source: Institute for Supply Management
Friday, July 5th - U.S. Employment Report
What: The Bureau of Labor Statistics releases comprehensive data on employment, unemployment rates, and wages. This report is one of the most closely watched economic indicators.
Impact: June's report shows 195,000 new jobs added, lower than the previous month's 272,000 but still indicating steady job growth. The unemployment rate holding steady at 4.0% and a slight moderation in wage growth (0.3% month-over-month) could influence the Federal Reserve's decisions on interest rates and overall monetary policy.
Source: Bureau of Labor Statistics
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