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Investing.com - Benchmark maintained its Buy rating on MercadoLibre (NASDAQ:MELI) with a price target of $2,875.00 following the company’s mixed second-quarter results. According to InvestingPro data, the company boasts impressive financial health with a "GREAT" overall score and strong revenue growth of 37.7% over the last twelve months.
The e-commerce and fintech giant delivered strong growth in gross merchandise volume (GMV), total payment volume (TPV), and revenue across its commerce and fintech segments, but fell short on profitability metrics.
The earnings miss was attributed to elevated marketing expenditures and the impact of a lower free shipping threshold in Brazil, which pressured margins during the quarter.
Benchmark expects MercadoLibre’s growth to remain robust, supported by deeper penetration in low-value categories in Brazil and continued strength in Mexico and Argentina. The firm also highlighted ongoing momentum in the company’s fintech business, with the Argentina credit card launch expected to build on recent gains.
Despite near-term margin pressure, Benchmark identified several offsetting tailwinds, including rising ad monetization boosted by the Google (NASDAQ:GOOGL) partnership, improving net income margin after losses, and operating leverage, leading the firm to raise its revenue forecasts for fiscal years 2025 and 2026.
In other recent news, MercadoLibre has announced that its board of directors approved a new compensation plan for independent directors and authorized a share repurchase program. This decision was detailed in a Securities and Exchange Commission filing, outlining that each independent director will receive an annual cash retainer and an equity award. Additionally, Citi has lowered its price target for MercadoLibre to $2,900 from $3,000, maintaining a Buy rating but expressing concerns about margin pressures due to recent investments in Brazil. Meanwhile, S&P Global Ratings has upgraded MercadoLibre to investment grade, highlighting the company’s strong operating and financial performance, particularly in key markets like Brazil, Mexico, and Chile.
In another development, MercadoLibre’s shareholders approved all proposals at the recent Annual Meeting of Stockholders, including the election of several directors. Cantor Fitzgerald also adjusted its price target for MercadoLibre, reducing it to $2,700 from $2,900, while maintaining an Overweight rating. This adjustment reflects concerns about rising shipping costs and their potential impact on earnings before interest and taxes in the latter half of 2025. These updates provide a comprehensive look at the recent developments surrounding MercadoLibre.
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