Shares of MercadoLibre (MELI -2.49%) were moving higher, in line with a broad upswing in tech stocks today. A strong retail sales report and comments from Federal Reserve Chairman Jerome Powell seemed to push the stock higher, as did a better-than-expected earnings report from rival Sea Limited (SE -4.21%), which closed up 14%.
MercadoLibre stock closed Tuesday up 6% even though there was no company-specific news out on the Latin American e-commerce specialist.
MercadoLibre operates only in Latin America, but because it's a high-growth tech stock, it's still subject to the same volatile market swings as its peers. Today, tech stocks were flying higher with the Nasdaq closing up 2.8%, though there wasn't a clear impetus for the gains. April retail sales were strong, up 0.9% monthly, or 8.2% from a year ago, though the numbers were pushed up by inflation.
Powell also made comments at a Wall Street Journal conference that seemed to push stocks higher as he asserted the central bank has the ability to bring inflation down. Though that could include aggressive rate hikes, which are generally considered negative for tech stocks, inflation is the biggest thorn in the side of the stock market, and removing that is the best way to end the pullback -- provided doing so doesn't crash the economy.
Finally, Sea Limited shares surged after that company posted strong results in its first-quarter earnings report. Though the company lowered its full-year guidance for its Shopee e-commerce platform, which counts Brazil as one of its biggest markets, it still called for 72% growth to the midpoint of the $8.5 billion to $9.1 billion revenue range.
MercadoLibre has already reported first-quarter earnings with currency-neutral revenue up 67.4% to $2.2 billion and operating income of $139 million, or a 6.2% margin, showing that the company continues to grow rapidly and put up strong profits even as U.S. e-commerce companies face headwinds from comparisons with the pandemic peak.
With the stock down more than 50% from its peak late last year and a forward price-to-sales ratio of just 5, now looks like a good time to buy shares of the Latin American growth star.