The results of Free market corresponding to the third quarter exceeded all projections made by analysts. The company of Marcos Galperin presented an earnings per share of $7.18compared to an expectation of US$5.99.
The adjusted earnings per share of the Argentine company had already surpassed analyst estimates in nine of the last 12 quarters, according to data from the Bloomberg agency. After the publication of the results, the e-commerce firm’s shares rose almost 2%.
In the words of the US bank JPMorganthis is explained because, despite the fact that the share price has dropped by 40% since the start of the pandemic, MELI continues to arouse great interest, since the company has been able to maintain a good pace of trade growth electronic, has been able to improve its EBIT margins (positive) and is aggressively growing its credit business
In that context, the ADR of the company, which is listed on the Nasdaqclimbed almost 5% the day before.
Net billing was US$3,760 million, which translates to 39.8% more than the previous year, while the consensus estimated US$3,560 million. However, it represents slower growth than the 44.8% in 2022.
As for the net profits of the Argentine unicorn, they were US$359 million, that is, 178% more than a year ago. In that context, the question that arises is whether it is a good time to buy Mercado Libre shares.
Mercado Libre, is it time to invest?
During the course of this year, Mercado Libre stock has demonstrated impressive performance in the New York marketwith an increase of more than 50% in dollars so far in 2023. This solid performance has also been reflected in the company’s Argentine Deposit Certificate (Cedear), which allows Argentine investors to acquire a fraction of the shares of the unicorn in local currency.
Cedear, like the action, is adjusted based on the variation in Mercado Libre prices and the implicit value in pesos of the dollar counted with settlement. This characteristic makes it an attractive currency hedging instrument for local investors.
That said, so far in 2023Mercado Libre’s Cedear has experienced an impressive 299% increase in Argentine pesos, which highlights its attractiveness as an investment option. However, it is not just about current performance, as the company has several strengths that position it favorably for the future.
Regarding the fundamentals that will drive the company in the coming years, experts highlight its focus on developing competitive advantages through technology. Mercado Libre seeks to consolidate its position in the market and capitalize on growth opportunities in both e-commerce as in the fintech sector in Latin America. Its commitment to efficiency and innovation supports its projection in a constantly evolving market.
However, it must be taken into account that, A company’s past performance does not guarantee future results. Mercado Libre has shown positive performance, but financial markets are changing and can be subject to various factors. Ultimately, the decision to invest in Mercado Libre should be based on each investor’s financial situation, objectives, and risk tolerance. So it is always best to consult with a financial professional before making any investment decision.
Source: Ambito
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