Mercadolibre hosts online commerce platforms in Latin America. It offers MercadoLibre Marketplace, an automated online e-commerce service for businesses and individuals to list items and conduct their sales and purchases online in a fixed-price or auction-based format. The company was founded in 1999 and is based in Vicente Lopez, Argentina.
MELI Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for MELI, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Mercadolibre Inc ranked in the 3th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 99%. In terms of the factors that were most noteworthy in this DCF analysis for MELI, they are:
The company's compound free cash flow growth rate over the past 5.51 years comes in at -0.04%; that's greater than only 23.66% of US stocks we're applying DCF forecasting to.
Mercadolibre Inc's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at -0.88. This coverage rate is greater than that of merely 19.74% of stocks we're observing for the purpose of forecasting via discounted cash flows.
Relative to other stocks in its sector (Technology), Mercadolibre Inc has a reliance on debt greater than merely 16.67% of them.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
AIRG, CAMP, CCRC, INIS, and KLIC can be thought of as valuation peers to MELI, in the sense that they are in the Technology sector and have a similar price forecast based on DCF valuation.
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(Bloomberg) -- Shares of Latin America’s largest e-commerce marketplace MercadoLibre Inc. climbed above $1,000 for the first time as online sales surge in the region amid the coronavirus pandemic.Up 78% this year, MercadoLibre has benefited from a growing number of consumers that are either buying online for the first time or increasing the frequency of their purchases because of virus-related lockdowns. The company said gross merchandise volume growth accelerated to 73% in April and UBS Group AG pointed to even stronger figures for the industry in May, citing data from Nielsen’s e-commerce researcher Ebit.“Recent sector data makes us more confident that Brazilian e-commerce growth could deliver on high expectations,” UBS Group analysts led by Gustavo Piras Oliveira wrote in a report da...