Earnings Beat: Here's What MercadoLibre, Inc. (NASDAQ:MELI) Analysts Are Forecasting For This Year

MercadoLibre, Inc. (NASDAQ:MELI) just released its quarterly report and things are looking bullish. It was a decent earnings report, with revenues and statutory earnings per share (EPS) both performing well. Revenues were 12% higher than the analysts had forecast, at US$4.3b, while EPS of US$6.78 beat analyst models by 14%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on MercadoLibre after the latest results.

See our latest analysis for MercadoLibre

Following the latest results, MercadoLibre's 21 analysts are now forecasting revenues of US$18.2b in 2024. This would be a notable 17% improvement in revenue compared to the last 12 months. Per-share earnings are expected to surge 51% to US$33.75. Before this earnings report, the analysts had been forecasting revenues of US$17.6b and earnings per share (EPS) of US$33.70 in 2024. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a small lift in to revenue forecasts.

Even though revenue forecasts increased, there was no change to the consensus price target of US$1,929, suggesting the analysts are focused on earnings as the driver of value creation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on MercadoLibre, with the most bullish analyst valuing it at US$2,160 and the most bearish at US$1,400 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await MercadoLibre shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the MercadoLibre's past performance and to peers in the same industry. It's pretty clear that there is an expectation that MercadoLibre's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 23% growth on an annualised basis. This is compared to a historical growth rate of 41% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 10% per year. So it's pretty clear that, while MercadoLibre's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target held steady at US$1,929, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for MercadoLibre going out to 2026, and you can see them free on our platform here.

You can also see whether MercadoLibre is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.