My top stock that could rise-3x in 3 years

It really takes a top stock to triple in three years. Nevertheless, I believe there is an excellent opportunity at the moment: Many growth stocks are currently cheaper again. On the other hand, nothing has changed in their growth charm.

Mercadolibre (NASDAQ:AMD) is my target for that goal. Today, let’s take a look at what makes this name a hot contender. General, operational growth, many megatrends and at the same time the possibility to scale are ultimately the three relevant keywords.

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Mercadolibre: Top stock that could go up 3x

Basically, Mercadolibre has an intact ecosystem in Latin America. Recently, among other things, a competitor has withdrawn Sea Limited back from important Latin American markets. It can increase the chance. The technical group is currently a leader in e-commerce and digital payment services. And also gradually expands its own possibilities.

That’s the first reason this top stock can still triple: new markets. Recently, the CFO of the tech group, for example, said that they would focus on the credit business. Other starting points would be wealth services, even cryptocurrencies could have potential. Originally, MercadoPago was just an e-commerce tool for Mercadolibre. In the meantime, however, a large part of the growth takes place here.

Mercadolibre grew 60% in local currencies on the revenue side in the third quarter. The payment service provider’s operating volume achieved a growth of 76%. This shows how much new business models can stimulate an appreciation of the top share. But also overall, that the Latin American group has not lost any of its growth charm, despite inflation, despite concerns in the global recession and more.

For me, further profitable growth will be essential for the possible top share and a tripling in three years. In the first nine months of this year, net profit was already 317 million US dollars. If the group’s scaling phase begins now, it may stimulate a reassessment.

Not too expensive either…

Mercadolibre’s stock isn’t too expensive for that target right now either. Currently, the market capitalization is 47 billion dollars. That means a price-to-sales multiple of just over 4 and a forward-looking 2022 price-to-earnings multiple of 100. Of course, this isn’t a value snapper. But in the entire Latin American market with megatrends, with growth and the prospect of more profitability, this top stock can surely triple again in three years. At least I see the chance.

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Vincent owns shares in Mercadolibre and Sea Limited. The Motley Fool owns shares in and recommends MErcadolibre and Sea Limited.

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