Why MercadoLibre Shares Soared on a Down Day

Shares MercadoLibre (MELIA 10.59%)Latin American e-commerce giant rose today even as the broader stock market slumped following a weak jobless report.

MercadoLibre shined after delivering a strong earnings report last night, posting another round of gains. Shares were up 10% by 12:01 ET Friday.

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MercadoLibre keeps growing and growing

The company reported revenue up 42% (or 113% in constant currency) to $5.1 billion, easily beating estimates of $4.7 billion.

Growth was strong in both e-commerce and digital payments businesses. Gross merchandise volume increased 20%, or 83% on a currency-neutral basis, to $12.6 billion. Total payments volume increased 36%, or 86%, in constant currency.

The company surpassed 50 million monthly active users on its fintech platform and saw a 19 percent increase in unique e-commerce buyers.

Operating income rose 31% excluding Argentina, but ongoing challenges in that country led to a 9% increase in overall operating income to $726 million. Increased credit charges and a change in shipment reporting also impacted operating income.

Lower currency losses and a lower tax rate helped earnings per share rise from $5.16 to $10.48, beating estimates by more than 20%.

In a letter to shareholders, management said: “Our ecosystem continues to gain traction, and our investments in products, technology and service levels reinforce our position as the leading e-commerce and fintech platform in the region.”

What’s next for MercadoLibre

MercadoLibre does not provide forecasts, but the company’s rapid quarter-on-quarter growth is its own evidence that it will maintain its momentum no matter what happens in the global economy or in key markets like Argentina.

It fended off competition from companies such as Amazon AND The Sea Limited and continues to expand in Latin America and add new revenue streams, such as advertising. The stock still looks like a strong buy, especially as the U.S. stock market suddenly looks volatile.