MercadoLibre Inc (MELI), the dominant online marketplace in Latin America, is expected to unveil its third-quarter 2024 financial results in late October or early November. Analysts predict adjusted earnings per share (EPS) of $10.55 and revenues of $5.25 billion, according to data from Benzinga Pro.
Goldman Sachs is optimistic about MercadoLibre’s performance, anticipating another strong quarter driven by significant growth in gross merchandise value (GMV), which is projected to further solidify its e-commerce market share. The firm also anticipates continued expansion in total payment volume (TPV) and its loan portfolio.
The bank expects local currency GMV growth to exceed 30% year-over-year in Brazil and Mexico, with notable acceleration in Argentina. However, the analyst acknowledges potential slight pressure on margins due to the launch of new logistics facilities, particularly in Brazil, which are still in the process of scaling.
The analyst’s EBIT projection of $749 million is slightly higher than the consensus of $740 million, attributing the difference to stronger GMV growth, despite anticipating slightly lower margins (13.9% vs. the consensus of 14.4%).
Despite potential margin pressure, the analyst maintains a Buy rating on MercadoLibre, with a +30% potential upside to the price target of $2,620. The analyst forecasts MercadoLibre’s total gross loan portfolio to reach $7.6 billion by the end of 2025 and $9.4 billion by the end of 2026 (compared to $4.9 billion as of the second quarter of 2024), with credit cards comprising 46% and 51% of the average annual loan book in 2025 and 2026, respectively. Since the fourth quarter of 2023, MercadoLibre has been issuing approximately 1.6 million new cards per quarter in Brazil, adding an average of $325 million to its consolidated credit card book. The analyst emphasizes that the management feels confident with this pace of origination, as MercadoLibre’s credit operations have always maintained risk management parameters that prioritize profitability over aggressive growth.
At last check on Thursday, MELI stock was down 0.51% at $2,037.47.
