MercadoLibre Stock Drops After Earnings Report
Latin American e-commerce giant, MercadoLibre, saw its stock drop after reporting better-than-expected fourth-quarter sales but missing earnings expectations. The company earned an adjusted $3.25 per share on sales of $4.3 billion for the December quarter, falling short of analyst expectations of $7.10 per share on sales of $4.1 billion.
Despite a 42% year-over-year revenue increase, MercadoLibre’s net income was $165 million, well below expectations of $361 million. The company attributed the earnings miss to one-off tax expenses in Brazil, impacting its profits.
MercadoLibre operates an e-commerce platform across 18 countries in Latin America, with strong growth in its fintech arm and e-commerce marketplace. Prior to earnings, MELI stock had gained 4.6% in Thursday’s session and had seen significant gains in recent quarters.
Analysts had given MercadoLibre a perfect IBD Composite Rating of 99 and an IBD Relative Strength Rating of 90 out of 99 before the earnings report. They suggest keeping an eye on MercadoLibre stock as the company continues to navigate the e-commerce and fintech industries in Latin America.
Investors and analysts alike will be watching closely to see how MercadoLibre responds and adjusts in the coming quarters to address the earnings miss and tax issues.
