Good one, thanks for sharing. But I feel you are a bit too bullish. I am more conservative. Not sure they will deliver this level of growth, and there is always a geopolitical/ FX risk. I estimate FV at $2521, buying around $1900.
Thanks for the comment. Geopolitical and FX risks are nothing new to MELI; they have grappled with these challenges for the past two decades yet have still delivered extraordinary growth. One can only imagine how much faster they could grow in a stable economic environment.
SOTP is another method you could explore, but I found that the financials lack sufficient granular information to reverse engineer a full historical P&L for e-commerce and financial services as a starting point.
Yeah that's fair. One way to do it would be to value the e-comm portion and historical fintech and see how much the credit is worth based on current price.
I aggregated the following items: provision for doubtful debts, credit card receivables, payables and accrued expenses, and funds payable to customers.
The macro environment in Latin America has been challenging for the past two decades, yet MELI has achieved incredible growth despite these conditions. One can only wonder how much more it could have grown in a stable macro environment.
Dziękuję! :)
Welcome 👍
Great summary. Thank you!
Thank you 👌
Good one, thanks for sharing. But I feel you are a bit too bullish. I am more conservative. Not sure they will deliver this level of growth, and there is always a geopolitical/ FX risk. I estimate FV at $2521, buying around $1900.
Thanks for the comment. Geopolitical and FX risks are nothing new to MELI; they have grappled with these challenges for the past two decades yet have still delivered extraordinary growth. One can only imagine how much faster they could grow in a stable economic environment.
Clear approach! I like the OCF cleanup. It could be interesting to value separately the ecomm and finance biz as they carry different profiles.
SOTP is another method you could explore, but I found that the financials lack sufficient granular information to reverse engineer a full historical P&L for e-commerce and financial services as a starting point.
Yeah that's fair. One way to do it would be to value the e-comm portion and historical fintech and see how much the credit is worth based on current price.
What did you considered to take out of the total OCF to give you 3.8 Billion. Provision of doubtful accounts and what else?
I aggregated the following items: provision for doubtful debts, credit card receivables, payables and accrued expenses, and funds payable to customers.
Ahhh noted! That makes sense. Thank you.
OCF / 2 (adjusted then) and still undervalued 👀
Expected rev growth around 20% is always a problem. Any macro change and the stock price might correct heavily. Still watchlist
Thanks
The macro environment in Latin America has been challenging for the past two decades, yet MELI has achieved incredible growth despite these conditions. One can only wonder how much more it could have grown in a stable macro environment.