Why MercadoLibre Stock Was Soaring on a Down Day

Shares of MercadoLibre (MELI 10.59%)the Latin America e-commerce giant, were climbing today even as the broad stock market collapsed following a weak unemployment report.

MercadoLibre was shining after delivering a strong earnings report last night, posting another round of breakout growth. The stock was up 10% as of 12:01 pm ET on Friday.

Image source: Getty Images.

MercadoLibre keeps growing and growing

The company reported revenue growth of 42% (or 113% in constant currency) to $5.1 billion, which easily beat estimates at $4.7 billion.

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

The company topped 50 million monthly active users on its fintech platform and saw unique-buyer growth of 19% in e-commerce.

Operating income was up 31% excluding Argentina, but ongoing challenges in that country led to overall operating income increasing 9% to $726 million. Increased credit write-offs and a change in shipping reporting also affected operating income.

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

In its shareholder letter, management said, “Our ecosystem is gaining more traction, and our investments in product, technology and service levels are extending our position as the region’s leading e-commerce and fintech platform.”

What’s next for MercadoLibre

MercadoLibre doesn’t give guidance, but its rapid growth, quarter in and quarter out, is its own assurance that the company can keep up its momentum no matter what happens in the global economy or key markets like Argentina.

It has fended off competition from the likes of Amazon and Sea Limited and keeps expanding in Latin America and adding new revenue streams like advertising. The stock continues to look like a strong buy, especially with the US stock market suddenly looking shaky.