(Shared this on twitter yesterday but feel it's also worth sharing here for anyone that doesn't follow me there)

I’ve been taking a look at $MELI recently from a financial perspective.

Revenue: Extremely strong growth since the start of 2019. $MELI also estimate 55% growth in Q4 and 36% for full year 2022.

Gross Profit: Similar trend to revenue. Interesting to note that gross profit (68%) increased faster than revenue (66%) last quarter. Scale. Gross margin currently sits at 43%.

Operating Expenses: Main item I am focused here on is Sales & Marketing. As we can see S&M as a % of revenue is trending down over time.

This means that $MELI cannot be deemed to be subsidising e-commerce revenue through excessive S&M. For comparison $SE ratio is 40%.

Valuation: Despite all of this growth, $MELI is at its lowest Price/Sales valuation multiple since March 2020 when the pandemic hit.

For further comparison, $SE trades at a price to sales multiple of 18 vs $MELI 13 with $MELI also having a 3% point better gross margin.

Conclusion

I really need to keep digging with this one. As growth stocks go, this one looks very reasonably priced at the moment and the upside appears to well outweigh the downside.