Quick, name the large-cap e-commerce company with triple-digit earnings growth in recent quarters, revenue growth of 35% or more, and analyst estimates for an 85% increase this year in earnings per share.

If you guessed Argentina-based MercadoLibre (NASDAQ: MELI), well, there’s no prize, but you’re right. If you guessed the more familiar Amazon.com Inc. (NASDAQ: AMZN), then you may have defaulted to home-country bias. That’s a phenomenon whereby investors favor domestic markets due to familiarity. It’s common in all developed markets, and in the U.S., with tremendous equity asset-class diversification, it’s understandable why investors don’t look overseas. 

You might have guessed Alibaba Group Holding Ltd. (NYSE: BABA), the China-based e-commerce giant, but that stock has struggled recently with slowing revenue and a stock price that’s down 18.44% in the past year. 

So let’s get out our binoculars and look toward Argentina.

"Amazon Of Latin America"

MercadoLibre, with a market capitalization of $62.33 billion, actually has the nickname "Amazon of Latin America," due to its e-commerce strength, as well as its capabilities in fintech and fulfillment. It’s the largest online commerce ecosystem in Latin America, based on unique visitors and orders processed. 

The company has a presence in 18 countries, with its main markets being Argentina, Brazil, Mexico, Colombia, Chile, Uruguay, Peru and Ecuador, where its logistics operations are the strongest. 

In 2020, the company launched MeliAir with a fleet of dedicated aircraft covering routes across Brazil and Mexico, with the aim of improving delivery times. The company also has a network of independent neighborhood stores and commercial points designated as sites to receive packages, helping ease pick-up, drop-off and returns.  

The company also operates Mercado Pago, an integrated digital payments solution.

Exceeding Earnings & Revenue Views

MarketBeat’s MercadoLibre earnings data show the company exceeding revenue and net income views in each of the past four quarters. 

A look at the MercadoLibre chart shows the stock rallying in the past week, as it attempts to climb out of a pullback that began in late May. It began correcting roughly at the same time as Amazon, in the second half of 2021, then failed to get much traction until July 2022, when it rallied and began forming a base, which it cleared in January of this year.

MercadoLibre stock is up 43.09% this year, despite the recent pullback.

The company has a three-year revenue growth rate of 68% and an earnings growth rate of 86%. It has a return on equity of 28.7%, a strong number that indicates a well-managed company. That’s important because it often indicates an efficient company, that’s poised for further growth. 

Investors Willing To Pay Up

This is a very growth-y stock, with a forward price-to-earnings ratio of 70, which indicates that investors are willing to pay 70 times the expected earnings per share. It suggests that investors anticipate significant future growth and are willing to pay a premium for that.

Along those lines, analysts expect MercadoLibre to grow earnings to the tune of 85% this year, to $17.72 per share. Wall Street is eyeing growth of another 41% in 2024. 

In the first quarter of this year, e-commerce revenue was nearly $1.7 billion, while fintech revenue was more than $1.3 billion. 

To be clear, that’s a fraction of Amazon’s recent quarterly revenue of $127.4 billion, and it’s also dwarfed by Alibaba’s sales of $30.3 billion. However, growth is what matters when evaluating this stock, and the company has said in no uncertain terms that’s where its efforts lie. 

It's About Price Growth, Not A Dividend

In the most recent annual report, MercadoLibre said that after reviewing its capital allocation process, its board decided the company has “multiple investment opportunities that can generate greater return to shareholders through investing capital into the business over a dividend policy.”

MercadoLibre’s growth rates seem to be promising, relative to either Amazon or Alibaba, neither of which is expected to post the kind of earnings gains Wall Street anticipates from MercadoLibre this year.

However, Amazon is expected to deliver earnings growth of 71% in 2024, although as a more mature, bigger stock, you could make the argument that it may not show the kind of price appreciation that MercadoLibre may be capable of.