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

***

Data taken from Motley Fool CAPS and Yahoo! Finance on 03/03/2008.

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.

Margins

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%

All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

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:

Gmarket is a Motley Fool Rule Breakers pick; Sadia is a Motley Fool Hidden Gems recommendation; Amazon, eBay, and Cemex are all on the Stock Advisor scorecard; and Cemex is also a Global Gains find. And, the Fool owns a few shares of Cemex. Find out more with a bushel of fresh 30-day trial passes. Or just sign up for a free CAPS account to find the identities of your fellow Fools who were quoted above. They might have more to tell you!

Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings if you like, and Foolish disclosure is the Punxsutawney Phil of financial forecasting.