MercadoLibre is an Argentine company that operates online marketplaces dedicated to e-commerce and online auctions. In just the past year, MercadoLibre has witnessed a monumental surge in their stock performance, swelling from around $600 at the beginning of 2020 to more than $1700 today, a near 300% increase. Despite shrinking its earnings per share by 68% per year, MercadoLibre was still able to achieve a 62% revenue growth rate over 2020. Of course, this extraordinary success can definitely be attributed to the persistence of COVID-19. Marcos Galperín, President and CEO of MercadoLibre, estimated that the pandemic actually moved MercadoLibre around 3-5 years ahead of its original growth timeline. According to estimates by Morgan Stanley, MercadoLibre controls 28% of Latin America’s e-commerce market, an incredible leap from 19% in 2015. As the world prepares for the release of an effective COVID-19 vaccine in the next month or so, MercadoLibre could potentially see its stock price go down as the public begins to move away from its reliance on e-commerce to facilitate their transactions.
As MercadoLibre looks to the future, they will attempt to expand outside of its core markets, which mainly reside in Brazil, Mexico, and Argentina. With over 100 million people currently using MercadoLibre’s platforms in Latin America, there is definitely still potential for MercadoLibre to continue its meteoric surge in the e-commerce market. For comparison, MercadoLibre’s market capitalization (the market value of a publicly traded company’s outstanding shares) is $85.42 billion, while Alibaba’s $BABA is $645 billion. Clearly, MercadoLibre is not on the same scale as a company like the Chinese e-commerce giant, but could definitely be on its way to get to that level. With plans to expand their business operations into a greater part of Latin America, could we see MercadoLibre begin to compete with e-commerce companies like Amazon $AMZN and Alibaba? As the pandemic hopefully subsides in the next few months, we will see if MercadoLibre’s continued success can come to fruition.
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