Is Mercado Libre a buy?
Mercado Libre. More than Amazon! Equity Research! Part 3/3
Welcome to 3rd and final Part of this Mercado Libre Deep Dive!
In the first part, we talked about how Mercado Libre built its e-commerce and logistics businesses. In Part 2. I told you how Mercado empowers the money to flow. I recommend readers start with them!
Today we will discuss which opportunities Mercado can execute on, in what shape are its finances and lastly, we’ll look at its valuation!
1. Opportunities
2. Financial Analysis
3. Valuation
4. Base Case
5. Bull Case
6. Conclusion
1. Opportunities
As a fast-growing and innovative company in a dynamic region, Mercado Libre has a large runway for growth. Let’s take a look!
Increased E-commerce Penetration
Latin America lags behind other regions in e-commerce penetration. In 2023, approximately 11% of retail sales were done online.
As we can see in the graph above, 30% of all retail sales in the UK and China originate online, and over 20%