MercadoLibre Growth Strong but Margin Pressure Persists, Wedbush Says

MT Newswires Live02-26

MercadoLibre (MELI) reported mixed Q4 results as strong gross merchandise volume and revenue growth were offset by margin pressure tied to elevated investment spending, Wedbush said in a Wednesday note.

The firm said GMV rose 36.8% year over year to $19.9 billion and revenue increased 44.6% to $8.8 billion, both ahead of expectations, while units sold jumped more than 43%, though GMV per unit declined.

Wedbush said operating margin of 10.1% fell short of estimates as higher advertising, logistics investments and credit provisions weighed on profitability, with the investment cycle expected to remain a near-term overhang on operating income.

The firm reiterated its outperform rating but lowered its price target to $2,400 from $2,600, citing reduced operating income forecasts despite raising GMV growth expectations and maintaining a positive long-term view on the company's competitive positioning.

Shares of the company were down by more than 10% in recent trading.

Price: 1748.00, Change: -174.56, Percent Change: -9.08

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap
Leave a comment