Amazon vs MercadoLibre: a Stock Duel
2 leading e-commerce giants with exceptional strengths
Amazon and MercadoLibre are two remarkable success stories in the e-commerce world. Amazon, a member of the Magnificent 7, is a household name and is on track to potentially become the first company to achieve $1 trillion in annual sales within the next decade. Meanwhile, MercadoLibre, a standout performer in South America, is currently one of the fastest-growing stocks and has already reached profitability. It truly shines as a jewel of the region.
Both companies boast diversified revenue streams across various sectors like cloud computing, payments, and services, positioning themselves as one-stop shops for both businesses and consumers.
When comparing the two, the competition is incredibly close:
Amazon, with its lower valuation and global dominance, has the potential to further increase its margins, offering significant leverage for investors.
On the other hand, MercadoLibre is experiencing exceptionally high growth, which is expected to continue in the coming years.
In this tight duel, Amazon emerges as the winner by a narrow margin (6.5/10 vs. 6.4/10 for MercadoLibre). However, this victory is largely due to Amazon's market position. For those seeking higher growth potential, MercadoLibre might be the more appealing choice.
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Could you please explain a bit how you come to the fair value of Mercado Libre? The DCF value seems really low to me. With such a high predicted growth in combination with such a decent P/FCF it seems the value should be way higher, no?