Free marketthe Argentine e-commerce and fintech unicorn, remains on the radar of investors for 2024 and the US bank JPMorgan expects shares to rise 70%.
The financial institution establishes a target price of US$2,000 in December 2024 for the share of the company founded in Argentina, which is currently trading at around US$1,195. “We see Free market as a core holding in a Latin American portfolio,” analysts wrote in a report. Marcelo Santos, Froylan Mendez and Jessica Mehle.
It should be noted that the company founded by Marcos Galperin It reached a historical maximum of around US$1,850 in mid-2021, when the company reached a market capitalization of around US$100,000 million, while today it is on the verge of US$60. 000 million.
“The company presents a unique combination of leadership in e-commerce coupled with accelerated growth in fintech (from Mercado Pago),” the analysts wrote.
And they added: “We expect EBIT margins – earnings before interest and taxes – to increase significantly from 10% in 2022, reaching 18% in 2031, driven by growth in advertising, credit and improving profitability.”
In 2022, the total turnover of Free market reached US$10.5 billion and is estimated to close this year at US$13.8 billion and 2024 at US$17.0 billion, according to BloombergNews.
Among the main factors that could drive the stock market rise, the JPMorgan stood out in this report to the fledgling advertising business. It should play a crucial role in improving the company’s margins, as it offers the highest margins among all its business units with a direct contribution of around 90% and an EBIT margin of 75-80%, the company added. entity.
How does advertising work in Mercado Libre?
The Display Ads they focus on the brand awareness and offer advertising space in various formats and positions within the website and applications, including their home page and search banners, he explained JPMorgan.
These ads are priced using a cost per thousand impressions (CPM) model and can be shown to all customers or to specific audiences defined by algorithms. Free market. They can be purchased through a direct purchase agreement or through programmatic purchases, allowing brands or services that do not sell on the platform to also use them.
On the other hand, the Product Ads They follow a model of traditional advertising used to promote products by improving their visibility in relevant positions within search results and product pages. According to JPMorgan, it follows a cost-per-click (CPC) model and uses an auction system to promote ads based on the maximum CPC the advertiser is willing to pay and the quality of the ad and the reputation of the seller.
Finally, the Audience Deals They aim to reach users of Free market off the shelf. This advertising uses other media to deliver advertisements to platform users who browse those sites. In addition to the general brand building objectives, this solution aims to target the brand loyalbuyers who are in the market, competitive buyers, and buyers who viewed a product but did not make a purchase.
Source: Ambito
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