Is $MELI a buy now?Stock has taken a beating recently after their recent dilution (senior note offering). I’m a novice in investing and have seen this stock as one of Motley’s favorites last year. It seems like the company is a major player in South America (ecommerce and fintench) and wondering whether the current valuation, for this growth company, is attractive. Would love experienced investors thoughts.
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MELI is probably the most value-priced of the emerging market e-commerce plays, though I haven’t yet owned it personally — it is back to the price/sales multiple it has traded at for most of the past decade, so it no longer has a “Covid premium” like most of the e-commerce stocks do. They have a battle coming with Sea Ltd. trying to break into Mexico and Brazil, but MELI has built a strong market share without spending nearly as heavily as SE, so they’ll probably spend more than expected and disappoint on earnings, but they’re the incumbent and have a powerful brand so it will be interesting to see how it plays out. I’m beginning to get tempted, though I haven’t done the work to really understand the company’s current plan or prospects yet.
Thank you, Travis! Appreciate your prompt response and insights.