In it Mercadolibre-The stock (WKN: A0MYNP) that sounded a bang after the numbers for the second quarter. In late US trading, shares rose about 11% to $995. Meanwhile, even four-digit US dollar rates seemed at least within reach. Let’s see what official, regular trade brings today.
But were the quarterly numbers really that good? Well, at least they weren’t bad and definitely had their highlights. Let’s dig a little deeper into it below.
Mercadolibre shares: boom thanks to these figures!
To begin with, Mercadolibre stock has enjoyed solid growth rates. Revenue increased 56.5% on a currency-neutral basis to DKK 2.6 billion. This is roughly the growth we have seen in recent quarters, and which we could probably expect. After all, the volume is constantly increasing and has reached a high level in recent years.
In addition, e-commerce gross merchandise volume increased to USD 8.6 billion, representing an increase of 26.2%. Once again, it is the payment volume which showed growth of over 86% and is truly gigantic at $30.2 billion. Just by looking at the volumes, we probably don’t need to point out again that a large part is processed without connection to online trading.
The net result is surprising and probably one of the reasons for the significant increase in the price of the Mercadolibre share. A value of $123 million, which equates to a net margin of 4.7%, is solid to start with. Should a period of profitable growth come now, it could just be the beginning of the rally or reversal.
All in all, a very solid set of quarterly numbers that Mercadolibre stock is presenting to us here. It may also show that the current concerns such as inflation or rising interest rates in the US do not mean such a strong effect due to a diverging core market.
The valuation of the Mercadolibre stock naturally increases with the share price. In late US trading alone and the trading day before, stocks accounted for a lot. This means that the ratio between price and sales should also become more expensive again.
Nevertheless, the value should be somewhere around 7, which does not necessarily have to be too expensive. Finally, Latin Americans are increasingly showing that they are following in the footsteps of leading Western e-commerce players and digital payment service providers. Just united in one share, which could allow for a double chance.
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Vincent owns shares in Mercadolibre. The Motley Fool owns shares of and recommends MercadoLibre.