Key Takeaways
- Capital Research Global Investors expanded its MELI holdings by 22.5% during Q4, acquiring an additional 408,939 shares for a total position of 2,225,031 shares worth approximately $4.48 billion.
- Hedge funds and institutional investors collectively own 87.62% of MercadoLibre’s outstanding shares.
- First-quarter revenue surged 49% year-over-year to $8.85 billion, surpassing analyst expectations, while earnings per share of $8.23 fell short of the $8.75 consensus forecast.
- Board member Alejandro Nicolas Aguzin purchased 600 shares at $1,655.93 per share in May, expanding his personal holdings by 12.62%.
- Wall Street maintains a Moderate Buy rating with a mean price target of $2,255.33, despite multiple firms reducing their targets post-earnings.
Shares of MercadoLibre (MELI) began Friday’s trading session at $1,607.80, reflecting a 1.7% decline and remaining significantly below the 52-week peak of $2,645.22. The stock currently trades beneath both its 50-day moving average of $1,720.81 and its 200-day moving average of $1,887.84.
The most notable institutional activity came from Capital Research Global Investors, which boosted its stake by 22.5% during the fourth quarter. The investment firm added 408,939 shares, elevating its total position to 2,225,031 shares valued at approximately $4.48 billion. This position now represents MELI as the firm’s 24th largest holding, accounting for 0.8% of its overall portfolio.
Several additional institutional players expanded their MELI exposure during the same period. Hardy Reed, Rothschild Investment, Interchange Capital Partners, Cornerstone Select Advisors, and Mitchell Capital Management each recorded incremental position increases. Combined, institutional investors and hedge funds now control 87.62% of the company’s shares.
Regarding insider transactions, Director Alejandro Nicolas Aguzin acquired 600 shares on May 22nd at a mean price of $1,655.93, totaling approximately $994,000. This purchase increased his stake to 5,355 shares, currently valued at more than $8.8 million.
First Quarter Results: Strong Sales Growth, Profit Shortfall
MercadoLibre unveiled its first-quarter financial performance on May 7th. The company generated $8.85 billion in revenue, marking a 49% increase from the prior-year period and exceeding the analyst consensus of $8.29 billion. The top-line performance demonstrated robust momentum.
Profitability metrics, conversely, disappointed investors. Earnings per share landed at $8.23, falling $0.52 below the Street’s expectation of $8.75. This represented a year-over-year decline from the $9.74 EPS reported in the same quarter last year, drawing scrutiny from market observers.
The company’s return on equity measures 29.58% while net margin stands at 6.04%. Wall Street anticipates full-year EPS of $40.97. MercadoLibre currently trades at a price-to-earnings ratio of 42.43, with a PEG ratio of 0.99.
Wall Street Adjusts Price Expectations Downward
The earnings disappointment triggered a series of price target reductions across the analyst community, though most firms maintained positive outlooks.
JPMorgan reduced its target price from $2,100 to $1,900 while maintaining a neutral stance. UBS trimmed its forecast from $2,050 to $1,750, also with a neutral rating. Morgan Stanley lowered expectations from $2,600 to $2,450 but retained its overweight recommendation. Goldman Sachs established a $2,100 price target. Daiwa downgraded the stock from buy to hold with an $1,800 target.
Among the 18 analysts tracking MercadoLibre, one assigns a Strong Buy rating, eleven recommend Buy, five suggest Hold, and one rates it Sell. The average consensus price target stands at $2,255.33 — approximately 40% higher than current trading levels.
MercadoLibre maintains a market capitalization of $81.52 billion, with a current ratio of 1.16 and a debt-to-equity ratio of 0.63. The stock’s 52-week low sits at $1,495.00.
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