MercadoLibre Inc. (MELI): Is MELI stock Accelerate After Recent Trade?


MercadoLibre Inc (MELI), an online retailer, has reported quarterly results. Success in the e-commerce arena has yielded an increase in revenue and an increase in the number of paying users and buyers.

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 MercadoLibre’s revenue in the last quartile was $1.3 billion, up 149 % year-on-year. Retail sales grew 124%, which was the primary growth driver. The digital payment system boosted revenue by 60%. MercadoLibre sold 6.6 billion in the last quarter, a 108% increase.

Faster growth has been seen in the digital payment industry. There were almost 150 % more payments than the year before, with a total of $15.9 billion. This year there were over 659 million payment transactions, a 130% increase from a year prior. A rise of 71% in the number of unique active users occurred during this quarter, while a 110% increase in items shipped occurred during the quarter.

The increase in MercadoLibre Inc. (MELI) revenue was accompanied by a drop in gross margin, which was 37 % due to aggressive pricing and high shipping costs during the holiday season. Furthermore, in the fourth quarter, MELI increased its R&D expenditure by 115% to $87 million. In the end, the company lost $51 million, or $1.02 per share. Investing in R&D is almost always detrimental to short-term profits but can lead to long-term growth if the company is provided with new technologies.

A MercadoLibre management reported that Latin America has the fastest-growing e-commerce regions in the world. Digital sales growth did not stop even when malls and stores opened in the fourth quarter. Even once the pandemic is over, the company’s financial position can still be solid, even if growth slows.

At present, MercadoLibre Inc (MELI) is trading at about $1528.00, implying a 261.90% jump in value since its 52-week low. During intraday trading, MELI shares climbed up to $1,655.00 and dived down to $1,518.72. Recent trading has seen a change of just -6.97% in intraday trading for the company’s shares, as the 52-week high has been $2020.00 and the 52-week low has been $422.22.


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