This miercoles por la noche -- Wednesday night, for us Anglophiles -- we're getting a first-quarter earnings report all the way from Argentina. It's MercadoLibre
What Fools say:
Here's how MercadoLibre's CAPS rating stacks up against some of its peers and competitors:
Market Cap (millions) |
Trailing P/E Ratio |
CAPS Rating |
|
---|---|---|---|
eBay |
$35,130 |
102.6 |
|
Amazon.com |
$26,130 |
55.8 |
|
Mercadolibre |
$1,660 |
204.2 |
|
Gmarket |
$1,130 |
32.4 |
|
Liquidity Services |
$264 |
24.0 |
Marching ahead of the pack, shoulder-to-shoulder with South Korean counterpart Gmarket, the company shows us the appeal of localized auction houses -- Rioplatense villas and Joseon pagodas alike.
Simply put, the CAPS bulls on this stock see the early days of eBay playing out all over again, and predict a similar skyrocketing business trajectory. The 'Bay or Amazon are mentioned many times over as prospective buyers of the whole company, and it's also a way to tap into the rampant growth we're seeing out of Latin America these days.
The bears point to (surprise!) unreasonable valuation -- even after a 54% price cut in the last two months.
What management does:
The operating margin trend is the real story here. The company is accelerating the share of operating profits quarter by quarter, while doing the same in sales growth.
6/2006 |
9/2006 |
12/2006 |
3/2007 |
6/2007 |
9/2007 |
|
---|---|---|---|---|---|---|
Gross |
78.3% |
78.3% |
76.8% |
77.2% |
77.4% |
77.6% |
Operating |
2.9% |
2.9% |
10.4% |
13.1% |
16.9% |
21.3% |
Net |
8.3% |
8.3% |
2.1% |
3.4% |
5.4% |
8.4% |
FCF/Revenue |
7% |
7% |
7.8% |
12.6% |
11.2% |
10.1% |
One Fool says:
Any Fool would relish the chance to get in on the next eBay in its early growth stages. For its leading market position in a high-margin business with powerful network effects, MercadoLibre made a spirited run for the title of best international stock for 2008, but eventually lost out to Cemex
Will it be enough to justify the lofty stock price? It's hard to tell with such a short operating history, but Mercado does have the expertise of its more than 10% ownership by eBay to fall back on. Patience is a virtue, Fool.
Further Foolishness: