What's In The Cards For MercadoLibre (MELI) In Q2 Earnings?
Zacks Investment Research | Aug 01, 2019 11:15PM ET
MercadoLibre, Inc. (NASDAQ:MELI) is set to report second-quarter 2019 results on Aug 7.
The company topped the Zacks Consensus Estimate in two of the trailing four quarters, with an average positive surprise of 112.74%.
Past-Quarter Performance
In the last reported quarter, MercadoLibre had reported earnings of 13 cents per share against the Zacks Consensus Estimate of a loss of 1 cent. Notably, the company reported a loss of 29 cents in the year-ago quarter.
Revenues increased 16.5% on a year-over-year basis (92.9% on an FX neutral basis) to $473.8 million, surpassing the Zacks Consensus Estimate of $412.7 million. The top line was driven by the company’s strong performance by MercadoPago and MercadoEnvios.
Q2 Estimates
For the second quarter, the Zacks Consensus Estimate for earnings is pegged at 28 cents per share. Further, the consensus mark for revenues is projected at $497.58 million.
Let’s see how things are shaping up prior to this quarter.
Factors to Consider
MercadoLibre’s strengthening key offerings, especially online-to-offline offerings will continue to aid the top line in the to-be-reported quarter.
Further, its growing initiatives toward strengthening fintech business are major positives. Moreover, increasing adoption of MercadoPago on the back of well-performing merchant services and mobile wallet business is expected to drive the company’s total payment volume in the second quarter.
Additionally, rising installation rate of the company’s MPOS devices remains encouraging.
Furthermore, MercadoLibre’s robust free shipping program continues to aid in delivering better shopping experience. Moreover, it is likely to aid the company’s shipment growth via MercadoEnvios, which in turn will the upcoming quarterly results.
Moreover, increasing investment by the company on its logistics services is expected to aid the performance of its delivery system in the quarter under review.
All these factors are likely to benefit MercadoLibre’s results in the second quarter.
However, increasing expenses related to warehousing, infrastructure transition on public clouds, free shipping subsidies and discounts on mPOS devices remain major concerns for the company’s margin expansion.
What Our Model Says
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has good chance of beating estimates if it also has a positive Zacks Investment Research
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