MercadoLibreShort from $402.50. Could see some more buying in the near future - this is a long term play.
- Due to increase in investment towards free shipping and loyalty programmes, chargebacks marketing as well as higher maintenance posting and fraud prevention cost, margins are currently under pressure.
- Free shipping and loyalty programmes are currently at their initial stage of deployment and as they progress they will increasingly put pressure on the margins.
- NASDAQ:MELI is also exposed to a large foreign exchange risk, the company currently operates in 19 different countries, with different currencies and the SEC requires that the money earned is to be converted to dollars. Thus, if the US dollar was to appreciate or depreciate vs foreign currencies, it can severely impact the company’s financial results.
- Their different segments experience seasonality. Fewer listings after Christmas, and other holidays results in weaker demand in the first quarter. However, year-end shopping can cause stronger demand in the fourth quarter. The seasonality causes large fluctuations in revenues and profits and makes the forecasting difficult.
- Price to book is 52.72 vs industry average of 6.47.
- 98.05% institutional ownership
- $940m Short Interest
NeroTree Capital rates MercadoLibre Inc as a SELL with a price target of $300 over the next 52w.
