With this decline, shares of the Latin American e-commerce company have lost slightly more than a quarter of their value year to date.
Investors who are searching for a specific reason for the fall in share price may end up disappointed as the company had not announced any negative news during the month. However, two possible factors may have contributed to MercadoLibre's share-price weakness. One is the across-the-board sell down in growth stocks as the Federal Reserve sounded its hawkish stance, intending to rapidly raise interest rates to combat inflation that's hovering at a four-decade high. With the Nasdaq Composite Index falling by 13.3% last month, it's no surprise that a wide swath of stocks on the index would suffer from bearish sentiment.
The other worry concerns the gradual reopening of borders as countries successfully tackle the coronavirus omicron variant. As people shrug off the effects of the pandemic and start to travel and move around in greater numbers, investors are nervously looking at whether the e-commerce sector can continue to grow.
MercadoLibre continues to impress with the release of its 2022 first-quarter earnings report. Gross merchandise volume rose 26.5% year over year to $7.7 billion, while the number of payment transactions jumped by 73.2% year over year to nearly 1.1 billion. As a result, the total payment value on the company's Mercado Pago platform surged by 72% year over year to $25.3 billion. The company's credit portfolio at Mercado Credito closed the quarter at $2.4 billion, catapulting more than fourfold from the $576 million in the same period last year. Net revenue soared by 63.1% year over year to a record $2.2 billion, and MercadoLibre chalked up a net income of $65 million, reversing a net loss of $34 million in the prior-year period.
In the area of partnerships, the company has also not disappointed. It recently announced a 10-year logistics partnership with Brazilian airline Gol Linhas Aereas Inteligentes SA for cargo transportation. MercadoLibre expects to quadruple its air cargo transportation capacity from the current 10 million packages to 40 million per year with this deal.