Mercadolibre, An Earnings Jumping Bean (MELI)

MercadoLibre, Inc. (NASDAQ: MELI) posted quarterly revenue increased 73.9% to $26.9 million, with an operating income margin increase to 27.1%. It also reported income from operations of $7.3 million and a net income increase of 188% to $5.3 million.  First Call had estimates pegged at $26.88 million for revenues.

New confirmed registered users for the three-month period ended December 31, 2007 were 1.6 million. Total confirmed registered users increased to 24.9 million as of December 31, 2007, an increase of 37.1% over December 31, 2006.  Its gross merchandise volume was $461.0 million in Q4-2007, up 40.2% from Q4-2006. Successful items sold through MercadoLibre totaled 4.8 million during Q4-2007, up 17.9% from Q4-2006. Total payment volume was $56.8 million, up 86.8% over Q4-2006.

Some comments from Marcos Galperin, President & CEO were, "….we delivered revenue growth of 73.9% and operating income margins of 27.1%. Growth rates were strong across all of our business units as well as all of our key geographies. Clearly, we are continuing to benefit from the positive growth trends influencing internet,
broadband and PC penetration rates in Latin America, and we believe this course will persist for many years to come…. we intend to leverage our leadership position and the industry dynamics in Latin America to further drive top-line growth and sustain margins throughout the year…"

As of the close, its market cap was $1.64 Billion, so at $85.1 million in 2007 revenues this one trades at 19-times trailing revenues; and with analyst targets at $132.3 million for 2008, this trades at 12-times revenues.  Mercadolibre was featured by Jim Cramer as a winner, although the shares are far lower after running up initially from his "look at it now" point.  Shares closed up 3.5% at $37.12, and the initial response is slightly higher by less than 1% in after-hours trading.  Its 52-week trading range is $21.00 to $81.17.

Jon C. Ogg
March 5, 2008