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MercadoLibre, Inc. Just Missed Earnings - But Analysts Have Updated Their Models
Shareholders might have noticed that MercadoLibre, Inc. (NASDAQ:MELI) filed its quarterly result this time last week. The early response was not positive, with shares down 7.0% to US$1,510 in the past week. It looks like the results were a bit of a negative overall. While revenues of US$11b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 6.6% to hit US$8.83 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the most recent consensus for MercadoLibre from 25 analysts is for revenues of US$54.0b in 2027. If met, it would imply a major 40% increase on its revenue over the past 12 months. Per-share earnings are expected to shoot up 45% to US$53.97. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$54.1b and earnings per share (EPS) of US$55.17 in 2027. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
Check out our latest analysis for MercadoLibre
It might be a surprise to learn that the consensus price target was broadly unchanged at US$2,260, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values MercadoLibre at US$2,800 per share, while the most bearish prices it at US$1,750. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The period to the end of 2027 brings more of the same, according to the analysts, with revenue forecast to display 31% growth on an annualised basis. That is in line with its 33% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 13% annually. So it's pretty clear that MercadoLibre is forecast to grow substantially faster than its industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on MercadoLibre. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for MercadoLibre going out to 2028, and you can see them free on our platform here..
You still need to take note of risks, for example - MercadoLibre has 2 warning signs we think you should be aware of.
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