MercadoLibre stock gained more than 8% Friday following a strong first quarter earnings report. The Latin American e-commerce firm beat expectation for both earnings and sales, with strong growth in Mexico and Brazil.
In results published late Thursday, MercadoLibre said that it earned an adjusted $6.78 per share on sales of $4.3 billion for the March-ending quarter. On average, analysts projected the Uruguay-based company would post adjusted earnings of $6.10 per share on sales of $3.84 billion, according to FactSet.
For the same period a year earlier, MercadoLibre posted adjusted earnings of $3.97 per share on sales of $3.04 billion.
On the stock market today, MercadoLibre stock rallied 8.2% to close at 1,630.56
MercadoLibre: E-Commerce And Fintech Growth
Often called the Amazon.com of Latin America, MercadoLibre operates an e-commerce platform across 18 countries. Its largest markets are Brazil, Mexico and Argentina, where it was founded. It also offers Mercado Pago, a fintech business that includes a Venmo-like digital wallet popular in the region.
The total volume of payments handled by MercadoLibre's fintech arm climbed 35% to $40.7 billion for the March quarter. The gross merchandise volume sold through its e-commerce marketplace climbed 20% year over year to $11.4 billion.
With Argentina's economy struggling amid a battle against rapid inflation, the company's news release highlighted "excellent results" in Brazil and Mexico. Gross merchandise volume decreased 22% in Argentina while increasing 36% in Brazil and 43% in Mexico.
Wedbush analyst Scott Devitt reiterated a buy rating for MercadoLibre following the report.
"We continue to see a clear path to higher take rate and profit margin driven by rising fulfillment adoption, advertising growth, and scale," Devitt wrote.
Advertising revenue grew 64% year over year, MercadoLibre said.
MercadoLibre Stock: Technical Ratings
With Friday's early gains, MercadoLibre shares are up 5% this year compared to a gain of 7.5% for the S&P 500. Over the past 12 months, MercadoLibre stock is up 31% compared to a 24.5% gain for the S&P 500.
Coming into the report, MercadoLibre stock had an IBD Composite Rating of 72 out of a best-possible 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.
Further, MercadoLibre's IBD Relative Strength Rating was 52 out of 99.
