E-commerce giant Amazon.com and its Latin American rival MercadoLibre have two things in common. Both retailers continue to design potential new breakouts. And both stand ready to deliver either a trick or a treat when they report earnings on Halloween.
MercadoLibre Vs. Amazon: Where MELI Stock Leads
In pure size, Amazon dwarfs MercadoLibre. With sales of $148 billion in the second quarter, Amazon commands a market capitalization of $1.98 trillion. In its latest quarterly report, MercadoLibre generated revenue of just over $5 billion and currently has a market cap of just under $105 billion.
But in several other metrics, MercadoLibre leads.
MELI stock sports the highest-possible 99 Composite Rating, topping a score of 94 for Amazon stock. And while Amazon does not earn a spot on any of IBD's premier stock lists, MercadoLibre makes the IBD 50 and IBD Sector Leaders, IBD's most stringent screen.
You'll also find MercadoLibre on IBD Leaderboard alongside Nvidia and Meta Platforms.
Amazon's 1.4 up/down volume ratio and B- Accumulation/Distribution Rating top the 1.1 and C+ grades for MELI stock. But MercadLibre shows clear institutional demand with eight quarters of rising fund ownership, according to IBD Stock Checkup. Amazon shows none.
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MercadoLibre Targets 93% EPS Growth This Year
Founded in Argentina but headquartered in Uruguay, MercadoLibre is the largest e-commerce company in Latin America. Facing stiff competition from Amazon, the company also has a robust payments platform and small-business lending arm.
In Q2, MercadoLibre generated a 103% spike in earnings to $10.48 per share. When the company reports Q3 numbers on Oct. 31, analysts expect a 48% gain to $10.57 a share. Estimates for the full year call for a 93% rise to $37.65 per share, followed by a 34% gain to $50.40 in 2025.
For Amazon, analysts forecast 21% earnings growth to $1.14 per share for the third quarter, leading to a 63% rise to $4.73 a share for the full year.
MELI Stock Already In Buy Range As New Breakout Nears
Earlier this month, MercadoLibre bounced off its 10-week moving average to offer a buying opportunity. It remains in a 2,020-2,121 buy range from that entry.
MELI stock has just also crafted a 2,161.73 buy point in a second-stage flat base. While forming that pattern, the stock has found consistent support right along its ascending 50-day line. Also note how a breakout would lift MELI stock back to its all-time high.
Meanwhile, trading in Amazon stock has tightened up in recent weeks. In another sign of healthy action, the e-commerce and cloud-computing giant has seen its 21-day exponential moving average retake its longer-term 50-day line. If its Halloween earnings deliver a treat rather than a trick for Wall Street, Amazon could clear an early handle-like entry at 195.37.
Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.
