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 (Nasdaq: MELI), the biggest online auction outfit in Latin America, and this Fool has swapped his jingly cap for a gaucho hat to prepare for the report.
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 (Nasdaq: EBAY) |
$35,130 |
102.6 | |
|
Amazon.com (Nasdaq: AMZN) |
$26,130 |
55.8 | |
|
Mercadolibre |
$1,660 |
204.2 | |
|
Gmarket (Nasdaq: GMKT) |
$1,130 |
32.4 | |
|
Liquidity Services (Nasdaq: LQDT) |
$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 (NYSE: CX) and Sadia (NYSE: SDA). Nothing much has changed since then -- after all, the vote ended just three weeks ago. MercadoLibre is still a brilliant little company with oceans of growth ahead of it.
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:
