Section 1: Company Overview and Fundamentals

1.1 Company Overview:

MercadoLibre Inc (NASDAQ: MELI) operates the largest online commerce and payments ecosystem in Latin America. It provides its users the online commerce and payments tools through its online commerce platform and related services. The company operates across 18 countries including: Argentina, Brazil, Mexico, Colombia, Chile and Peru.

1.2 The Key Positives, Negatives, Investment Highlights and Risks

1.3 Top 10 Shareholders: The top 10 shareholders have been highlighted in the chart below, which together forms ~42.00% of the total shareholding.

1.4 Key Metrics:

The company has posted a decent uptick in EBITDA margin to reach 14.2% in 2QFY22 from 12.9% in 2QFY21. The company’s current ratio improved to 1.30x in 2QFY22 from 1.18x in 2QFY21.

Section 2: Business Updates and Financial Highlights

2.1 Recent Updates:

2.2 Insights of 2QFY22:

Section 3: Key Risks and Outlook:

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

4.2 Fundamental Valuation

Valuation Methodology: EV/EBITDA Multiple Based Relative Valuation (Illustrative)

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is October 11, 2022. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.