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MercadoLibre MELI is slated to report first-quarter 2025 results on May 7.
The Zacks Consensus Estimate for first-quarter revenues is pegged at $5.53 billion, suggesting year-over-year growth of 27.54%. The consensus mark for earnings is pinned at $7.67 per share. The estimate indicates year-over-year growth of 13.13%.
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MELI Estimate Movement
Image Source: Zacks Investment Research
MELI Earnings Surprise History
In the last reported quarter, the company delivered an earnings surprise of 73.69%. The company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, and missed once, with the average surprise being 16.37%.
Earnings Whispers for MELI
Our proven model predicts an earnings beat for MercadoLibre this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
MELI has an Earnings ESP of +2.30% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Shaping Upcoming Results of MELI
MercadoLibre’s e-commerce platform grew strongly in 2024, reaching more than 100 million unique buyers. The company improved user experience with features like virtual try-ons and tire installation scheduling. It also launched Full Super, a new grocery section designed to make shopping easier, help users reorder quickly, and show progress toward free shipping to boost basket sizes. These innovations are expected to have increased customer satisfaction and engagement in the first quarter of 2025.
Furthermore, the company saw strong user frequency and growth in low-ticket categories in the prior quarter, which is expected to have continued in the first quarter. Overall e-commerce growth is likely to have remained strong, with top line growing significantly. The advertising business might also have contributed marginally to the top line in the first quarter. MercadoLibre is strengthening partnerships, enhancing advertising technology and incorporating display, brand, and video advertisements. These efforts are expected to have boosted monetization, increased engagement and improved product visibility in the quarter to be reported.
Mercado Pago, MercadoLibre’s fintech arm, surpassed 60 million monthly active users in 2024, supported by the launch of 5.9 million new credit cards. Instant access to pre-approved credit and flexible 18-month instalment plans helped drive adoption and boosted engagement during high-value purchases. The company expanded its offerings with the MELI Dollar stablecoin and localized investment options like LCI and LCA. This is expected to have continued growing the company’s top line, supported by expanded credit issuance and new investment products.
MercadoLibre experiences fewer listings after Christmas, summer vacation and other holidays, which results in weaker demand in the first quarter. The first quarter remains the weakest for the company in a year. The top line and bottom line are expected to have taken a hit due to the seasonality.
Competition from the likes of e-Commerce giants, such as Amazon AMZN, Alibaba BABA, and Walmart WMT, might have intensified in the first quarter, especially in Mexico and Brazil. These global rivals bring pricing pressure, fulfillment scale, and brand recognition. Their push into low-ticket and essential items could have challenged MELI’s margins and user retention in the quarter under review.
