Long-term investors should not give too much consideration to short-term price movements, but January was certainly a rocky ride for many investors. The stock market at large sank sharply in January, sending the SPDR S&P 500 ETF (SPY 0.08%) down 9% before recovering slightly in the last two days of the month. When the stock market sinks as quickly as it did, many investors turn pessimistic and worry about high-quality companies -- a mistake that could be costly in 10 years.
Many analysts, however, stand firm with their conviction through these downward times. Credit Suisse's (CS) Stephen Ju has a price target of $2,200 for MercadoLibre (MELI -1.88%), which implies 94% upside from today's prices. JPMorgan (JPM -0.40%) analyst Anna Lizzul has an even brighter outlook on fuboTV (FUBO 2.40%) over the next year with a price target of $28, implying 161% upside. While long-term investors should be focused on three to five years into the future, it's worth looking at some companies that analysts think could perform well in 2022.
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A growth story still in the early stages
MercadoLibre has found its place in Latin America as one of the largest logistics, e-commerce, and digital payments companies. The company has almost 79 million active users -- representing 12% of the Latin American population -- and it controls 37% of all logistics orders in Latin America, including 65% of Mexico's logistics space.
Now that MercadoLibre has taken control of these markets in the region, it isn't sitting back on its heels. The company is still looking to grow more and continue innovating, leading to continued hypergrowth, even as a $57 billion company. In third-quarter 2021, the company saw revenue grow 73% year over year to $1.9 billion and net income grow 535% to $95 million.
This growth has been partly due to MercadoLibre's innovative endeavors, like Mercado Credito, which offers credit cards and loans to merchants. MercadoLibre recently made another potentially lucrative endeavor in crypto. The company made investments in two Latin American platforms focused on bringing cryptocurrency adoption to the region: MercadoBitcoin.com, a leading crypto exchange, and Paxos, a platform that allows consumers to buy, sell, and hold crypto.
Despite these forward-looking investments, many investors think that they missed the boat with MercadoLibre, considering it is up over 3,870% since coming public in 2007. However, there is still plenty of room left for it to grow, even in its core business. No Latin American country has large e-commerce adoption yet, with less than 13.5% of its retail sales being e-commerce orders. However, e-commerce is growing rapidly in the region. Brazil, Argentina, and Mexico saw 21% to 26% year-over-year growth in e-commerce sales in 2021, implying that while e-commerce is still relatively small, it is seeing major adoption in the region.
MercadoLibre is a market leader in Latin America with significant shares in all three parts of its business, yet shares are down 42% from their all-time highs. With the increasing prevalence of e-commerce, digital finance, and the internet broadly going forward, I think that MercadoLibre will have tons of room to continue dominating in the region as a leader, which is why I think it has tons of upside for both next year and beyond.
A different streaming service
Consumers in the U.S. and around the world are cutting the cord. In 2021, there were 48 million U.S. households without cable, compared to 79 million with it. However, this is expected to change by 2023, with 56 million households without cable compared to just 73 million. The trend of how consumers pay for their television is changing drastically, and it has been for years, but one thing that has held many people up is the inability to get live sports and news with streaming services like Netflix (NFLX -1.22%). Few streaming services focus on providing all-encompassing streaming for live television, except for fuboTV.
With fuboTV being one of the only services focusing solely on this important aspect of TV, it has seen major adoption. The company announced preliminary fourth-quarter results -- which are not confirmed or audited, but rather updated guidance -- and reported nothing but strength. Its subscriber base is expected to reach 1.1 million users, which is growth of 100% year over year and 16% sequentially. More importantly, the company is expecting its subscriber base to churn less. It estimates that its churn rate will improve by 200 basis points compared to the year-ago period.
This major growth will likely continue, especially among soccer fans. The company recently announced that it gained exclusive rights to the UEFA European Championship, which includes the 2024 and 2028 Euros -- a major competition in the world of European soccer. While the company is not profitable today -- it lost $106 million in Q3 2021 -- this has been decreasing and will likely keep improving as fuboTV sees continued growth. I think that fuboTV could thrive and enable millions of users to cut the cord across America, making the company potentially a great investment over the next decade.
