[GUEST ACCESS MODE: Data is scrambled or limited to provide examples. Make requests using your API key to unlock full data. Check https://lunarcrush.ai/auth for authentication information.]  Dimitry Nakhla | Babylon Capitalยฎ [@DimitryNakhla](/creator/twitter/DimitryNakhla) on x 14.6K followers Created: 2025-07-19 18:19:37 UTC A quality valuation analysis on $MELI ๐ง๐ฝโโ๏ธ โขNTM P/E Ratio: 43.76x โข2-Year Mean: 49.08x As you can see, $MELI appears to be trading near fair value Going forward, investors can receive ~12% MORE in earnings per share ๐ง *** Before we get into valuation, letโs take a look at why $MELI is a great business BALANCE SHEETโ โขCash & Short-Term Inv: $8.07B โขLong-Term Debt: $2.80B $MELI has a strong balance sheet, a BBB- S&P Credit Rating & 45x FFO Interest Coverage RETURN ON CAPITAL๐โก๏ธโ โข2020: XXX% โข2021: XXX% โข2022: XXXX% โข2023: XXXX% โข2024: XXXX% โขLTM: XXXX% RETURN ON EQUITY๐โก๏ธโ โข2020: (0.1%) โข2021: XXX% โข2022: XXXX% โข2023: XXXX% โข2024: XXXX% โขLTM: XXXX% $MELI has strong and improved return metrics, highlighting the financial efficiency of the business REVENUESโ โข2019: $2.30B โข2024: $20.78B โขCAGR: XXXXX% FREE CASH FLOWโ โข2019: $314.29M โข2024: $7.05B โขCAGR: XXXXX% NORMALIZED EPSโ โข2019: ($3.71) โข2024: $XXXXX SHARE BUYBACKSโ โข2019 Shares Outstanding: 48.69M โขLTM Shares Outstanding: 50.70M MARGINS๐โก๏ธโ โขLTM Gross Margins: XXXX% โขLTM Operating Margins: XXXX% โขLTM Net Income Margins: XXX% ***NOW TO VALUATION ๐ง As stated above, investors can expect to receive ~12% MORE in EPS Using Benjamin Grahamโs 2G rule of thumb, $MELI has to grow earnings at a XXXXX% CAGR over the next several years to justify its valuation Today, analysts anticipate 2025 - 2027 EPS growth over the next few years to be more than the (24.54%) required growth rate: 2025E: $XXXXX (31.2% YoY) 2026E: $XXXXX (35.8% YoY) 2027E: $XXXXX (33.7% YoY) $MELI has an ok track record of meeting analyst estimates ~2 years out, but letโs assume $MELI ends 2027 with $XXXXX in EPS & see its CAGR potential assuming different multiples 40x P/E: $3590๐ต โฆ ~17.6% CAGR 38x P/E: $3410๐ต โฆ ~15.1% CAGR 36x P/E: $3231๐ต โฆ ~12.6% CAGR 34x P/E: $3033๐ต โฆ ~10.0% CAGR As you can see, $MELI appears to have attractive return potential IF we assume >36x earnings (a multiple justified by its growth rate & moat) $MELI boasts an expansive growth trajectory, fueled by powerful network effects that should drive sustained momentum Key factors contributing to its promising outlook include ๐ X. Margin expansion X. Unparalleled access to Latin America's burgeoning economy X. Network effects & scale economies shared that produce self-reinforcing dynamics ensuring long-term competitiveness, among other things Those buying $MELI today at $2413๐ต are buying it for a slightly better than fair price, with little margin of safety โ these growth rates have to be revised down substantially for $MELI to miss the mark, even if the company grows earnings at XX% CAGR over the next X years, shareholders will likely end up with a decent return I consider $MELI a strong buy closer to $2250๐ต (~7% below todayโs price) where I can reasonably expect ~12% CAGR while assuming a conservative 34x end multiple, ensuring a larger margin of safety #stocks #investing ___ ๐๐๐๐๐๐๐๐๐๐โผ๏ธ: ๐๐ก๐ข๐ฌ ๐ข๐ฌ ๐๐๐ ๐๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐. ๐๐๐๐ฒ๐ฅ๐จ๐ง ๐๐๐ฉ๐ข๐ญ๐๐ฅยฎ ๐๐ง๐ ๐ข๐ญ๐ฌ ๐ซ๐๐ฉ๐ซ๐๐ฌ๐๐ง๐ญ๐๐ญ๐ข๐ฏ๐๐ฌ ๐ฆ๐๐ฒ ๐ก๐๐ฏ๐ ๐ฉ๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง๐ฌ ๐ข๐ง ๐ญ๐ก๐ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ข๐๐ฌ ๐๐ข๐ฌ๐๐ฎ๐ฌ๐ฌ๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ. ๐๐ก๐ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐๐จ๐ง๐ญ๐๐ข๐ง๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ ๐ข๐ฌ ๐ข๐ง๐ญ๐๐ง๐๐๐ ๐๐จ๐ซ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐ฉ๐ฎ๐ซ๐ฉ๐จ๐ฌ๐๐ฌ ๐จ๐ง๐ฅ๐ฒ ๐๐ง๐ ๐ฌ๐ก๐จ๐ฎ๐ฅ๐ ๐ง๐จ๐ญ ๐๐ ๐๐จ๐ง๐ฌ๐ญ๐ซ๐ฎ๐๐ ๐๐ฌ ๐ข๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐ ๐ญ๐จ ๐ฆ๐๐๐ญ ๐ญ๐ก๐ ๐ฌ๐ฉ๐๐๐ข๐๐ข๐ ๐ง๐๐๐๐ฌ ๐จ๐ ๐๐ง๐ฒ ๐ข๐ง๐๐ข๐ฏ๐ข๐๐ฎ๐๐ฅ ๐จ๐ซ ๐ฌ๐ข๐ญ๐ฎ๐๐ญ๐ข๐จ๐ง. ๐๐๐ฌ๐ญ ๐ฉ๐๐ซ๐๐จ๐ซ๐ฆ๐๐ง๐๐ ๐ข๐ฌ ๐ง๐จ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐ ๐จ๐ ๐๐ฎ๐ญ๐ฎ๐ซ๐ ๐ซ๐๐ฌ๐ฎ๐ฅ๐ญ๐ฌ. ๐๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐๐จ๐ง๐ญ๐๐ข๐ง๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ ๐ก๐๐ฌ ๐๐๐๐ง ๐จ๐๐ญ๐๐ข๐ง๐๐ ๐๐ซ๐จ๐ฆ ๐ฌ๐จ๐ฎ๐ซ๐๐๐ฌ ๐๐๐ฅ๐ข๐๐ฏ๐๐ ๐ญ๐จ ๐๐ ๐ซ๐๐ฅ๐ข๐๐๐ฅ๐, ๐๐ฎ๐ญ ๐ข๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐๐ ๐๐ฌ ๐ญ๐จ ๐๐จ๐ฆ๐ฉ๐ฅ๐๐ญ๐๐ง๐๐ฌ๐ฌ ๐จ๐ซ ๐๐๐๐ฎ๐ซ๐๐๐ฒ.  XXXXX engagements  **Related Topics** [$280b](/topic/$280b) [debt](/topic/debt) [longterm](/topic/longterm) [$807b](/topic/$807b) [balance sheet](/topic/balance-sheet) [quarterly earnings](/topic/quarterly-earnings) [$meli](/topic/$meli) [stocks consumer cyclical](/topic/stocks-consumer-cyclical) [Post Link](https://x.com/DimitryNakhla/status/1946636056968708578)
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Dimitry Nakhla | Babylon Capitalยฎ @DimitryNakhla on x 14.6K followers
Created: 2025-07-19 18:19:37 UTC
A quality valuation analysis on $MELI ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 43.76x โข2-Year Mean: 49.08x
As you can see, $MELI appears to be trading near fair value
Going forward, investors can receive ~12% MORE in earnings per share ๐ง ***
Before we get into valuation, letโs take a look at why $MELI is a great business
BALANCE SHEETโ โขCash & Short-Term Inv: $8.07B โขLong-Term Debt: $2.80B
$MELI has a strong balance sheet, a BBB- S&P Credit Rating & 45x FFO Interest Coverage
RETURN ON CAPITAL๐โก๏ธโ โข2020: XXX% โข2021: XXX% โข2022: XXXX% โข2023: XXXX% โข2024: XXXX% โขLTM: XXXX%
RETURN ON EQUITY๐โก๏ธโ โข2020: (0.1%) โข2021: XXX% โข2022: XXXX% โข2023: XXXX% โข2024: XXXX% โขLTM: XXXX%
$MELI has strong and improved return metrics, highlighting the financial efficiency of the business
REVENUESโ โข2019: $2.30B โข2024: $20.78B โขCAGR: XXXXX%
FREE CASH FLOWโ โข2019: $314.29M โข2024: $7.05B โขCAGR: XXXXX%
NORMALIZED EPSโ โข2019: ($3.71) โข2024: $XXXXX
SHARE BUYBACKSโ โข2019 Shares Outstanding: 48.69M โขLTM Shares Outstanding: 50.70M
MARGINS๐โก๏ธโ โขLTM Gross Margins: XXXX% โขLTM Operating Margins: XXXX% โขLTM Net Income Margins: XXX%
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~12% MORE in EPS
Using Benjamin Grahamโs 2G rule of thumb, $MELI has to grow earnings at a XXXXX% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2025 - 2027 EPS growth over the next few years to be more than the (24.54%) required growth rate:
2025E: $XXXXX (31.2% YoY) 2026E: $XXXXX (35.8% YoY) 2027E: $XXXXX (33.7% YoY)
$MELI has an ok track record of meeting analyst estimates ~2 years out, but letโs assume $MELI ends 2027 with $XXXXX in EPS & see its CAGR potential assuming different multiples
40x P/E: $3590๐ต โฆ ~17.6% CAGR
38x P/E: $3410๐ต โฆ ~15.1% CAGR
36x P/E: $3231๐ต โฆ ~12.6% CAGR
34x P/E: $3033๐ต โฆ ~10.0% CAGR
As you can see, $MELI appears to have attractive return potential IF we assume >36x earnings (a multiple justified by its growth rate & moat)
$MELI boasts an expansive growth trajectory, fueled by powerful network effects that should drive sustained momentum
Key factors contributing to its promising outlook include ๐
X. Margin expansion
X. Unparalleled access to Latin America's burgeoning economy
X. Network effects & scale economies shared that produce self-reinforcing dynamics ensuring long-term competitiveness, among other things
Those buying $MELI today at $2413๐ต are buying it for a slightly better than fair price, with little margin of safety โ these growth rates have to be revised down substantially for $MELI to miss the mark, even if the company grows earnings at XX% CAGR over the next X years, shareholders will likely end up with a decent return
I consider $MELI a strong buy closer to $2250๐ต (~7% below todayโs price) where I can reasonably expect ~12% CAGR while assuming a conservative 34x end multiple, ensuring a larger margin of safety
#stocks #investing
๐๐๐๐๐๐๐๐๐๐โผ๏ธ: ๐๐ก๐ข๐ฌ ๐ข๐ฌ ๐๐๐ ๐๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐. ๐๐๐๐ฒ๐ฅ๐จ๐ง ๐๐๐ฉ๐ข๐ญ๐๐ฅยฎ ๐๐ง๐ ๐ข๐ญ๐ฌ ๐ซ๐๐ฉ๐ซ๐๐ฌ๐๐ง๐ญ๐๐ญ๐ข๐ฏ๐๐ฌ ๐ฆ๐๐ฒ ๐ก๐๐ฏ๐ ๐ฉ๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง๐ฌ ๐ข๐ง ๐ญ๐ก๐ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ข๐๐ฌ ๐๐ข๐ฌ๐๐ฎ๐ฌ๐ฌ๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ.
๐๐ก๐ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐๐จ๐ง๐ญ๐๐ข๐ง๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ ๐ข๐ฌ ๐ข๐ง๐ญ๐๐ง๐๐๐ ๐๐จ๐ซ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐ฉ๐ฎ๐ซ๐ฉ๐จ๐ฌ๐๐ฌ ๐จ๐ง๐ฅ๐ฒ ๐๐ง๐ ๐ฌ๐ก๐จ๐ฎ๐ฅ๐ ๐ง๐จ๐ญ ๐๐ ๐๐จ๐ง๐ฌ๐ญ๐ซ๐ฎ๐๐ ๐๐ฌ ๐ข๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐ ๐ญ๐จ ๐ฆ๐๐๐ญ ๐ญ๐ก๐ ๐ฌ๐ฉ๐๐๐ข๐๐ข๐ ๐ง๐๐๐๐ฌ ๐จ๐ ๐๐ง๐ฒ ๐ข๐ง๐๐ข๐ฏ๐ข๐๐ฎ๐๐ฅ ๐จ๐ซ ๐ฌ๐ข๐ญ๐ฎ๐๐ญ๐ข๐จ๐ง. ๐๐๐ฌ๐ญ ๐ฉ๐๐ซ๐๐จ๐ซ๐ฆ๐๐ง๐๐ ๐ข๐ฌ ๐ง๐จ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐ ๐จ๐ ๐๐ฎ๐ญ๐ฎ๐ซ๐ ๐ซ๐๐ฌ๐ฎ๐ฅ๐ญ๐ฌ.
๐๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐๐จ๐ง๐ญ๐๐ข๐ง๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ ๐ก๐๐ฌ ๐๐๐๐ง ๐จ๐๐ญ๐๐ข๐ง๐๐ ๐๐ซ๐จ๐ฆ ๐ฌ๐จ๐ฎ๐ซ๐๐๐ฌ ๐๐๐ฅ๐ข๐๐ฏ๐๐ ๐ญ๐จ ๐๐ ๐ซ๐๐ฅ๐ข๐๐๐ฅ๐, ๐๐ฎ๐ญ ๐ข๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐๐ ๐๐ฌ ๐ญ๐จ ๐๐จ๐ฆ๐ฉ๐ฅ๐๐ญ๐๐ง๐๐ฌ๐ฌ ๐จ๐ซ ๐๐๐๐ฎ๐ซ๐๐๐ฒ.
XXXXX engagements
Related Topics $280b debt longterm $807b balance sheet quarterly earnings $meli stocks consumer cyclical