Financial Data and Key Metrics Changes - Revenue growth of 35% year-on-year despite FX headwinds in Mexico and Brazil [14] - Net income rose by 11% year-on-year, reaching $397 million [16] - EBIT was $557 million with a margin of 10.5%, with margin compression primarily due to strategic investments [15] Business Line Data and Key Metrics Changes - GMV growth of 34% year-on-year in Brazil and 27% in Mexico, with market share gains in both countries [6] - In Argentina, items sold grew by 16%, surpassing 60 million items sold, with nearly 7 million new buyers added [7] - Credit card TPV grew by 166% year-on-year, with a credit portfolio growth of 77% [12] Market Data and Key Metrics Changes - E-commerce penetration in Latin America remains low at 15%, indicating significant growth potential [8] - Fulfillment penetration increased by 4.5 percentage points year-on-year due to the opening of six new fulfillment centers [9] Company Strategy and Development Direction - Continued investment in enhancing customer experience and strategic initiatives in logistics and loyalty programs [6][8] - Plans to double the number of fulfillment centers in Brazil by the end of 2025, increasing same-day delivery capabilities [25] - Focus on long-term growth, profitability, and cash flow generation across commerce, fintech, and advertising [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth opportunities ahead, particularly in commerce and fintech [16] - Positive trends in Argentina's market environment, with improvements in consumer behavior and macroeconomic conditions [94] Other Important Information - Introduction of the Meli Mas benefits package, enhancing customer loyalty through cash back and fintech benefits [19] - Non-recurring expenses related to customer refunds impacted G&A expenses this quarter [84][86] Q&A Session Summary Question: Credit card portfolio growth and NIMAL spread pressures - Management noted that the credit card business is evolving positively, with a significant increase in portfolio share impacting NIMAL spreads [29][30] Question: Shipping investments and fulfillment center ramp-up - Management highlighted that fulfillment centers lead to higher GMV and improved user experience, with ongoing capacity expansion to meet future demand [36][38] Question: Differences between Brazil and Mexico credit card experiences - Management indicated that the ramp-up in Mexico has been faster due to prior experience, with significant growth potential in both markets [40][41] Question: Margin compression from fulfillment and advertising penetration - Management clarified that most margin compression was due to credit cards, with advertising revenues growing above GMV [43][54] Question: Impact of Meli Mas on user behavior and Blue funding - Management observed positive adoption of Meli Mas, leading to increased engagement and usage across platforms [70][71] Question: Credit environment in Brazil and origination confidence - Management expressed confidence in credit origination despite rising interest rates, attributing it to improved predictive models [74][76] Question: Software business development strategy - Management confirmed that software development will primarily be in-house, focusing on enhancing the acquiring business [65][66]

Core Insights - MercadoLibre reported quarterly earnings of $7.83 per share, missing the Zacks Consensus Estimate of $11.27 per share, but showing an increase from $7.16 per share a year ago [1][2] - The company posted revenues of $5.31 billion for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 1.11% and increasing from $3.76 billion year-over-year [3] - The stock has gained approximately 33% since the beginning of the year, outperforming the S&P 500's gain of 21.2% [4] Earnings Performance - The earnings surprise for the recent quarter was -30.52%, while the previous quarter saw a positive surprise of 20.18% [2] - Over the last four quarters, MercadoLibre has surpassed consensus EPS estimates two times and topped consensus revenue estimates four times [2][3] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $9.14 on revenues of $5.93 billion, and for the current fiscal year, it is $37.70 on revenues of $20.53 billion [8] - The estimate revisions trend for MercadoLibre is currently favorable, leading to a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [7] Industry Context - The Internet - Commerce industry, to which MercadoLibre belongs, is currently ranked in the top 27% of over 250 Zacks industries, suggesting a positive outlook for stocks within this sector [9]

Core Insights - Mercado Libre reported Q3 2024 net revenue of $5.3 billion, a 35% year-on-year increase, with operational income at $557 million, reflecting strategic investments for long-term success [2][8] - The company experienced significant growth in both e-commerce and fintech sectors, driven by increased user engagement and technological investments [3][4] E-commerce Performance - Unique buyers increased by 21% year-on-year to nearly 61 million, with Gross Merchandise Value (GMV) reaching $12.9 billion, a 14% increase in dollars [3][8] - Items sold rose nearly 28% to 456 million units, with over 94% of shipments managed by Mercado Libre's network, and 75% of deliveries completed in less than 48 hours [8] - Mercado Ads revenue grew by 37% year-on-year, contributing to the overall growth in the commerce segment [8] Fintech Performance - Mercado Pago's net revenue reached $2.2 billion in Q3, with total payment volume (TPV) increasing by 34% year-on-year to $50.7 billion [9] - Monthly active users for Mercado Pago expanded by 35% to 56 million, with total payment transactions rising by 47% to over 2.9 billion [9] - The credit portfolio for Mercado Pago grew by 77% year-on-year to $6 billion, while the credit card portfolio surged by 172% to $2.3 billion [7][9] Strategic Developments - The company opened five fulfillment centers in Brazil and one in Mexico during Q3, enhancing logistics capabilities and delivery speeds [5][8] - Mercado Libre's sponsorship of the Williams Racing F1 team aligns with its values of innovation and speed, further promoting its brand in the region [8]

Revenue and Financial Performance - Net revenues & financial income reached $5.3 billion, up 35% YoY and 103% FX-neutral[3] - Net income rose 11% YoY to $397 million, with a Net Income margin of 7.5%[26] - Consolidated net revenues in Brazil grew by 60% year-over-year in Q3'24[34] - Net revenues and financial income rose to $14,718 million for the nine months ended September 30, 2024, compared to $10,698 million in the same period of 2023[53] - Net income for the nine months ended September 30, 2024 was $1,272 million, compared to $822 million in the same period of 2023[53] - Net revenues and financial income for Q3 2024 totaled $5,312 million, with Brazil contributing $2,913 million, Mexico $1,145 million, Argentina $1,033 million, and other countries $221 million[57] - Net revenues and financial income increased by 35.3% to $5,312 million in Q3 2024 compared to $3,927 million in Q3 2023[68] - Net income for the nine months ended September 30, 2024, increased to $1,272 million from $822 million in 2023[56] Payment Volume and Transactions - Total Payment Volume (TPV) grew to $50.7 billion, up 34% YoY and 73% FX-neutral[3] - Total payment volume surged to $137.746 billion in the nine months ended September 30, 2024, from $102.278 billion in 2023[31] - Acquiring total payment volume rose to $100.367 billion in the nine months ended September 30, 2024, up from $81.221 billion in 2023[31] - Total payment transactions increased to 8.030 billion in the nine months ended September 30, 2024, from 5.275 billion in 2023[31] - Total payment volume in Mexico rose by 44% year-over-year in Q3'24[32] Gross Merchandise Volume (GMV) - Gross Merchandise Volume (GMV) increased to $12.9 billion, up 14% YoY and 71% FX-neutral[3] - Gross merchandise volume reached $36.919 billion for the nine months ended September 30, 2024, compared to $31.299 billion in 2023[31] - Gross merchandise volume in Argentina increased by 218% year-over-year in Q3'24[34] User Growth and Engagement - Unique buyers across the region reached 61 million, rising 21% YoY[4] - Fintech monthly active users (MAU) rose 35% YoY to 56 million[10] - Fintech monthly active users increased to 56 million in Q3'24 from 42 million in Q3'23[31] - Unique active buyers grew to 87 million in the nine months ended September 30, 2024, up from 74 million in the same period in 2023[31] Credit Portfolio and Assets - The credit card portfolio grew to $2.3 billion, up 172% YoY and 28% QoQ[11] - Total credit portfolio grew 77% YoY to $6.0 billion, with consumer book up 37% YoY[12] - Assets under management (AUM) grew 93% YoY to $8.0 billion[15] - Loans receivable, net of allowances, increased to $4,248 million in Q3 2024 from $2,629 million in December 2023[52] - Total assets increased to $22,623 million in Q3 2024 from $17,646 million in December 2023[52] Advertising Revenue - Advertising revenue grew 37% YoY, reaching a penetration of 2.0% of GMV, up 30 bps YoY[9] Expenses and Investments - Product and technology development expenses increased to $504 million in Q3 2024 from $396 million in Q3 2023[53] - Sales and marketing expenses grew to $566 million in Q3 2024 from $441 million in Q3 2023[53] - Investments in property and equipment and intangible assets totaled $555 million in Q3 2024, compared to $329 million in Q3 2023[71] - Changes in loans receivable, net, amounted to $3,316 million in Q3 2024, up from $1,465 million in Q3 2023[71] - Proceeds from loans payable and other financial liabilities related to Fintech solutions were $989 million in Q3 2024, compared to $94 million in Q3 2023[71] Cash Flow and Liquidity - Cash and cash equivalents decreased to $2,162 million in Q3 2024 from $2,556 million in December 2023[52] - Net cash provided by operating activities for the nine months ended September 30, 2024, was $4,994 million, up from $3,212 million in 2023[56] - Adjusted free cash flow for Q3 2024 was $635 million, down from $1,067 million in the same period last year[71] - Net increase in available cash and investments for Q3 2024 was $589 million, compared to $499 million in Q3 2023[71] - Net cash provided by operating activities in Q3 2024 was $4,994 million, up from $3,212 million in Q3 2023[71] - Available cash and investments at the end of Q3 2024 stood at $4,417 million, up from $3,774 million at the end of Q3 2023[71] Debt and Financial Liabilities - Net debt as of September 30, 2024, was $1,907 million, up from $1,505 million as of December 31, 2023[65] - Total debt as of September 30, 2024, increased to $6,324 million from $5,333 million as of December 31, 2023[65] - Total current liabilities rose to $14,313 million in Q3 2024 from $11,297 million in December 2023[52] Profitability and Margins - Gross profit for Q3 2024 reached $2,439 million, up from $2,095 million in Q3 2023[53] - Basic net income per share for Q3 2024 was $7.83, up from $7.18 in Q3 2023[54] - Gross profit rose by 16.4% to $2,439 million in Q3 2024 from $2,095 million in Q3 2023[68] - Income from operations decreased by 29.0% to $557 million in Q3 2024 from $785 million in Q3 2023[68] - Net interest margin after losses (NIMAL) decreased to 28.3% in the nine months ended September 30, 2024, from 35.1% in 2023[31] Investments and Financial Assets - Short-term investments as of September 30, 2024, were $1,109 million, down from $1,191 million as of December 31, 2023[65] - Long-term investments as of September 30, 2024, increased to $1,146 million from $81 million as of December 31, 2023[65] Direct Contribution and EBITDA - Direct contribution for Q3 2024 was $1,184 million, with Brazil contributing $505 million, Mexico $192 million, Argentina $457 million, and other countries $30 million[57] - Adjusted EBITDA for Q3 2024 was $714 million, compared to $920 million in Q3 2023[63]

Core Insights - MercadoLibre, Inc. reported its financial results for the quarter ending September 30, 2024, and hosted an earnings video conference on November 6, 2024 [1] Company Overview - MercadoLibre is the largest online commerce ecosystem in Latin America, based on unique visitors and processed orders, and is also a leading fintech platform in the region [5] - The company operates in 18 countries, including Argentina, Brazil, Mexico, Colombia, Chile, and Peru [5] E-commerce Platform - MercadoLibre provides a robust and safe environment for buyers and sellers, fostering a large e-commerce community in Latin America, which has a population of over 650 million [6] - The region is experiencing one of the fastest-growing Internet penetration and e-commerce growth rates globally [6] Fintech Services - Through its fintech platform, MercadoPago, the company offers a comprehensive set of financial technology services, including digital accounts, debit cards, online payments, insurance, savings, investments, and credit lines for individuals [7] - For merchants, MercadoPago provides online and physical point-of-sale payment processing services along with digital accounts [7]

Group 1: Company Overview - MercadoLibre (MELI) is a member of the Retail-Wholesale sector, which includes 210 individual stocks and currently holds a Zacks Sector Rank of 8 [2] - MercadoLibre belongs to the Internet - Commerce industry, which consists of 39 individual stocks and is currently ranked 66 in the Zacks Industry Rank [5] Group 2: Performance Metrics - MercadoLibre has returned approximately 33% since the beginning of the calendar year, outperforming the average return of 23.8% for Retail-Wholesale companies [4] - The consensus estimate for MercadoLibre's full-year earnings has increased by 11.5% over the past 90 days, indicating stronger analyst sentiment and an improving earnings outlook [3] Group 3: Comparison with Peers - Another Retail-Wholesale stock, Itochu Corp. (ITOCY), has returned 27% year-to-date and has a Zacks Rank of 1 (Strong Buy) with an 8.9% increase in its current year EPS estimate over the past three months [4][5] - The Internet - Commerce industry, to which MercadoLibre belongs, has gained an average of 32.2% so far this year, indicating that MELI is performing better in terms of year-to-date returns compared to its industry peers [5]

Core Viewpoint - Growth stocks are appealing due to their potential for above-average financial growth, but identifying strong candidates is challenging due to inherent risks and volatility [1] Group 1: Growth Stock Identification - The Zacks Growth Style Score aids in identifying promising growth stocks by analyzing real growth prospects beyond traditional metrics [2] - MercadoLibre (MELI) is highlighted as a recommended stock with a favorable Growth Score and a top Zacks Rank [2] Group 2: Earnings Growth - Earnings growth is crucial for investors, with double-digit growth being particularly desirable as it indicates strong future prospects [4] - MercadoLibre has a historical EPS growth rate of 201.7%, with projected EPS growth of 93.7% this year, significantly surpassing the industry average of 28.4% [5] Group 3: Cash Flow Growth - High cash flow growth is essential for growth-oriented companies, allowing them to fund new projects without external financing [6] - MercadoLibre's year-over-year cash flow growth stands at 70.7%, compared to an industry average of -7.1% [6] - The company's annualized cash flow growth rate over the past 3-5 years is 136.1%, against the industry average of 8.8% [7] Group 4: Earnings Estimate Revisions - Positive trends in earnings estimate revisions correlate strongly with stock price movements [8] - MercadoLibre has seen upward revisions in current-year earnings estimates, with a 0.4% increase in the Zacks Consensus Estimate over the past month [8] Group 5: Overall Assessment - MercadoLibre has achieved a Growth Score of A and a Zacks Rank of 2, indicating strong potential for growth investors [9]

Core Viewpoint - Brokerage recommendations, particularly for MercadoLibre (MELI), suggest a strong buy sentiment, but the reliability of these recommendations is questionable due to potential biases from brokerage firms [2][4][8]. Group 1: Brokerage Recommendations - MercadoLibre has an average brokerage recommendation (ABR) of 1.38, indicating a consensus between Strong Buy and Buy, with 76.5% of recommendations being Strong Buy and 5.9% being Buy [2]. - Despite the positive ABR, studies indicate that brokerage recommendations often fail to effectively guide investors towards stocks with significant price appreciation potential [3][8]. - The vested interests of brokerage firms can lead to an overly optimistic bias in their analysts' ratings, resulting in a disproportionate number of Strong Buy recommendations compared to Strong Sell [4][8]. Group 2: Zacks Rank Comparison - Zacks Rank, a proprietary stock rating tool, categorizes stocks from 1 (Strong Buy) to 5 (Strong Sell) and is based on earnings estimate revisions, which have shown a strong correlation with near-term stock price movements [6][9]. - The Zacks Rank for MercadoLibre is currently 2 (Buy), reflecting a 0.4% increase in the Zacks Consensus Estimate for the current year to $37.70, indicating positive sentiment among analysts regarding the company's earnings prospects [11][12]. - The ABR can serve as a useful guide for investors when validated against the Zacks Rank, which is more timely and reflective of current market conditions [10][12].

Group 1: MercadoLibre (MELI) - MercadoLibre is expected to report Q3 sales of $5.25 billion, reflecting a 40% increase from $3.76 billion in the same quarter last year [2] - Q3 earnings per share (EPS) are projected to rise 57% to $11.27, compared to $7.16 a year ago [2] - The company has shown strong growth prospects with high double-digit expansion anticipated for fiscal 2024 and FY25, and it has gained over 30% this year [3] Group 2: Toyota Motor (TM) - Toyota Motor's stock is trading at less than 1X sales, with Q3 revenue expected to increase by 1% to $79.78 billion [5] - Q3 EPS is anticipated to decrease to $4.39 from $6.54 in the prior-year quarter, but the stock trades at a forward earnings multiple of 7.9X [6] - Toyota has consistently exceeded the Zacks EPS Consensus for seven consecutive quarters, with an average earnings surprise of 77.93% in the last four quarterly reports [6] Group 3: Qualcomm (QCOM) - Qualcomm is projected to report Q4 sales of $9.9 billion, representing a 14% increase, with EPS expected to rise 27% to $2.56 [7] - The company is integrating generative AI into its product lines, enhancing its growth potential [7] - Qualcomm trades at a reasonable forward earnings multiple of 15.1X, which is competitive compared to other chipmakers [7] Group 4: Overall Market Outlook - MercadoLibre, Toyota Motor, and Qualcomm are identified as large-cap stocks that could see significant movement if they meet or exceed earnings expectations [9] - These companies are considered viable long-term investments, potentially becoming more attractive in the event of a post-earnings selloff [9]

Core Viewpoint - MercadoLibre is expected to report strong third-quarter results, with significant revenue and earnings growth anticipated compared to the previous year [3][11][17] Revenue Estimates - The Zacks Consensus Estimate for revenues in Q3 2024 is $5.25 billion, reflecting a 39.73% increase from the same quarter last year [3] - The consensus estimate for commerce revenues is $3.15 billion, indicating a year-over-year rise of 48.2% [8] - The consensus estimate for fintech revenues is $2.22 billion, suggesting year-over-year growth of 36.6% [10] Earnings Estimates - The Zacks Consensus Estimate for earnings per share is $11.27, representing a jump of 57.4% from the prior year [3] - MercadoLibre has an Earnings ESP of -24.24% and a Zacks Rank of 2 (Buy) [6][5] Performance History - The company has a mixed earnings surprise history, with a 20.18% earnings surprise in the last reported quarter [4] - It has beaten the Zacks Consensus Estimate in three of the last four quarters, with an average negative surprise of 1.63% [4] Key Growth Drivers - Core e-commerce operations are expected to show robust growth due to strategic initiatives, including brand strengthening and loyalty programs [7] - Product diversification in categories like fashion and consumer electronics is anticipated to drive growth [8] - Significant investments in logistics infrastructure are expected to improve delivery efficiency and customer experience [8] Advertising and Fintech Growth - The advertising segment is expected to benefit from technical improvements, enhancing revenue streams [9] - Mercado Pago continues to be a growth driver, with expanded product offerings and strong payment volume trends [10] Key Metrics Estimates - The Zacks Consensus Estimate for gross merchandise volume is $12.79 billion, indicating growth of 12.6% year-over-year [12] - Total payments volume is estimated at $49.23 billion, implying a 4.2% year-over-year growth [12] - The number of successful items sold is pegged at 430 million, suggesting a 20.4% increase [12] Price Performance - MercadoLibre's shares have gained 30.8% year-to-date, outperforming the Zacks Retail-Wholesale sector and the S&P 500 index [13] - The company is trading at a premium with a trailing 12-month P/S of 4.26X compared to the industry average of 1.7X, indicating a stretched valuation [15] Investment Outlook - The investment profile presents a mixed outlook, with strong long-term growth potential in Latin American e-commerce balanced against near-term challenges [16] - Despite macroeconomic headwinds, the company shows resilience due to its dominant market position and diversified revenue streams [17]