Offshore
Photo
โ Dimitry Nakhla | Babylon Capitalยฎ
RT @DimitryNakhla: A quality valuation analysis on $MELI ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 42.45x
โข1-Year Mean: 47.73x
As you can see, $MELI appears to be trading below fair value
Going forward, investors can receive ~12% MORE in earnings per share ๐ง ***
Before we get into valuation, letโs take a look at why $MELI is a great business
BALANCE SHEETโ
โขCash & Short-Term Inv: $3.70B
โขLong-Term Debt: $2.82B
$MELI has a strong balance sheet, an ok BB+ S&P Credit Rating & 48x FFO Interest Coverage
RETURN ON CAPITAL๐โก๏ธโ
โข2019: (4.8%)
โข2020: 3.7%
โข2021: 8.1%
โข2022: 14.7%
โข2023: 25.7%
โข2024: 23.0%
RETURN ON EQUITY๐โก๏ธโ
โข2019: (14.2%)
โข2020: (0.1%)
โข2021: 5.2%
โข2022: 28.7%
โข2023: 40.3%
โข2024: 51.5%
$MELI has strong and improved return metrics, highlighting the financial efficiency of the business
REVENUESโ
โข2019: $2.30B
โข2024: $20.78B
โขCAGR: 55.30%
FREE CASH FLOWโ
โข2019: $314.29M
โข2024: $7.05B
โขCAGR: 86.32%
NORMALIZED EPSโ
โข2019: ($3.71)
โข2024: $37.69
SHARE BUYBACKSโ
โข2019 Shares Outstanding: 48.69M
โขLTM Shares Outstanding: 50.70M
MARGINS๐โก๏ธโ
โขLTM Gross Margins: 52.7%
โขLTM Operating Margins: 12.7%
โขLTM Net Income Margins: 9.2%
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~12% MORE in EPS
Using Benjamin Grahamโs 2G rule of thumb, $MELI has to grow earnings at a 21.23% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2025 - 2027 EPS growth over the next few years to be more than the (21.23%) required growth rate:
2025E: $47.04 (24.8% YoY)
2026E: $65.23 (38.7% YoY)
2027E: $85.38 (30.9% YoY)
$MELI has an ok track record of meeting analyst estimates ~2 years out, but letโs assume $MELI ends 2027 with $85.38 in EPS & see its CAGR potential assuming different multiples
38x P/E: $3244๐ต โฆ ~19.5% CAGR
36x P/E: $3073๐ต โฆ ~17.2% CAGR
34x P/E: $2902๐ต โฆ ~14.7% CAGR
32x P/E: $2732๐ต โฆ ~12.2% CAGR
30x P/E: $2561๐ต โฆ ~9.6% CAGR
As you can see, $MELI appears to have attractive return potential IF we assume >32 earnings (a multiple well-justified by its growth rate & moat)
$MELI boasts an expansive growth trajectory, fueled by powerful network effects that should drive sustained momentum
Key factors contributing to its promising outlook include ๐
1. Margin expansion
2. Unparalleled access to Latin America's burgeoning economy
3. Network effects that produce self-reinforcing dynamics ensuring long-term competitiveness, among other things
Those buying $MELI today at $1996๐ต are buying a great business for a great price, with a decent margin of safety โ these growth rates have to be revised down substantially for $MELI to miss the mark, even if the company grows earnings at 22% CAGR over the next 5 years, shareholders will likely end up with a great result
I consider $MELI a steal closer to $1790๐ต (~10% below todayโs price) where I can reasonably expect ~11% CAGR while assuming a very conservative 26x end multiple, ensuring a large margin of safety
#stocks #investing
___
๐๐๐๐๐๐๐๐๐๐โผ๏ธ: ๐๐ก๐ข๐ฌ ๐ข๐ฌ ๐๐๐ ๐๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐. ๐๐๐๐ฒ๐ฅ๐จ๐ง ๐๐๐ฉ๐ข๐ญ๐๐ฅยฎ ๐๐ง๐ ๐ข๐ญ๐ฌ ๐ซ๐๐ฉ๐ซ๐๐ฌ๐๐ง๐ญ๐๐ญ๐ข๐ฏ๐๐ฌ ๐ฆ๐๐ฒ ๐ก๐๐ฏ๐ ๐ฉ๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง๐ฌ ๐ข๐ง ๐ญ๐ก๐ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ข๐๐ฌ ๐๐ข๐ฌ๐๐ฎ๐ฌ๐ฌ๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ.
๐๐ก๐ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐๐จ๐ง๐ญ๐๐ข๐ง๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ ๐ข๐ฌ ๐ข๐ง๐ญ๐๐ง๐๐๐ ๐๐จ๐ซ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐ฉ๐ฎ๐ซ๐ฉ๐จ๐ฌ๐๐ฌ ๐จ๐ง๐ฅ๐ฒ ๐๐ง๐ ๐ฌ๐ก๐จ๐ฎ๐ฅ๐ ๐ง๐จ๐ญ ๐๐ ๐๐จ๐ง๐ฌ๐ญ๐ซ๐ฎ๐๐ ๐๐ฌ ๐ข๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐ ๐ญ๐จ ๐ฆ๐๐๐ญ ๐ญ๐ก๐ ๐ฌ๐ฉ๐๐๐ข๐๐ข๐ ๐ง๐๐๐๐ฌ ๐จ๐ ๐๐ง๐ฒ ๐ข๐ง๐๐ข๐ฏ๐ข๐๐ฎ๐๐ฅ ๐จ๐ซ ๐ฌ๐ข๐ญ๐ฎ๐๐ญ๐ข๐จ๐ง. ๐๐๐ฌ๐ญ ๐ฉ๐๐ซ๐๐จ๐ซ๐ฆ๐๐ง๐๐ ๐ข๐ฌ ๐ง๐จ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐ ๐จ๐ ๐๐ฎ๐ญ๐ฎ๐ซ๐ ๐ซ๐๐ฌ๐ฎ๐ฅ๐ญ๐ฌ.[...]
RT @DimitryNakhla: A quality valuation analysis on $MELI ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 42.45x
โข1-Year Mean: 47.73x
As you can see, $MELI appears to be trading below fair value
Going forward, investors can receive ~12% MORE in earnings per share ๐ง ***
Before we get into valuation, letโs take a look at why $MELI is a great business
BALANCE SHEETโ
โขCash & Short-Term Inv: $3.70B
โขLong-Term Debt: $2.82B
$MELI has a strong balance sheet, an ok BB+ S&P Credit Rating & 48x FFO Interest Coverage
RETURN ON CAPITAL๐โก๏ธโ
โข2019: (4.8%)
โข2020: 3.7%
โข2021: 8.1%
โข2022: 14.7%
โข2023: 25.7%
โข2024: 23.0%
RETURN ON EQUITY๐โก๏ธโ
โข2019: (14.2%)
โข2020: (0.1%)
โข2021: 5.2%
โข2022: 28.7%
โข2023: 40.3%
โข2024: 51.5%
$MELI has strong and improved return metrics, highlighting the financial efficiency of the business
REVENUESโ
โข2019: $2.30B
โข2024: $20.78B
โขCAGR: 55.30%
FREE CASH FLOWโ
โข2019: $314.29M
โข2024: $7.05B
โขCAGR: 86.32%
NORMALIZED EPSโ
โข2019: ($3.71)
โข2024: $37.69
SHARE BUYBACKSโ
โข2019 Shares Outstanding: 48.69M
โขLTM Shares Outstanding: 50.70M
MARGINS๐โก๏ธโ
โขLTM Gross Margins: 52.7%
โขLTM Operating Margins: 12.7%
โขLTM Net Income Margins: 9.2%
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~12% MORE in EPS
Using Benjamin Grahamโs 2G rule of thumb, $MELI has to grow earnings at a 21.23% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2025 - 2027 EPS growth over the next few years to be more than the (21.23%) required growth rate:
2025E: $47.04 (24.8% YoY)
2026E: $65.23 (38.7% YoY)
2027E: $85.38 (30.9% YoY)
$MELI has an ok track record of meeting analyst estimates ~2 years out, but letโs assume $MELI ends 2027 with $85.38 in EPS & see its CAGR potential assuming different multiples
38x P/E: $3244๐ต โฆ ~19.5% CAGR
36x P/E: $3073๐ต โฆ ~17.2% CAGR
34x P/E: $2902๐ต โฆ ~14.7% CAGR
32x P/E: $2732๐ต โฆ ~12.2% CAGR
30x P/E: $2561๐ต โฆ ~9.6% CAGR
As you can see, $MELI appears to have attractive return potential IF we assume >32 earnings (a multiple well-justified by its growth rate & moat)
$MELI boasts an expansive growth trajectory, fueled by powerful network effects that should drive sustained momentum
Key factors contributing to its promising outlook include ๐
1. Margin expansion
2. Unparalleled access to Latin America's burgeoning economy
3. Network effects that produce self-reinforcing dynamics ensuring long-term competitiveness, among other things
Those buying $MELI today at $1996๐ต are buying a great business for a great price, with a decent margin of safety โ these growth rates have to be revised down substantially for $MELI to miss the mark, even if the company grows earnings at 22% CAGR over the next 5 years, shareholders will likely end up with a great result
I consider $MELI a steal closer to $1790๐ต (~10% below todayโs price) where I can reasonably expect ~11% CAGR while assuming a very conservative 26x end multiple, ensuring a large margin of safety
#stocks #investing
___
๐๐๐๐๐๐๐๐๐๐โผ๏ธ: ๐๐ก๐ข๐ฌ ๐ข๐ฌ ๐๐๐ ๐๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐. ๐๐๐๐ฒ๐ฅ๐จ๐ง ๐๐๐ฉ๐ข๐ญ๐๐ฅยฎ ๐๐ง๐ ๐ข๐ญ๐ฌ ๐ซ๐๐ฉ๐ซ๐๐ฌ๐๐ง๐ญ๐๐ญ๐ข๐ฏ๐๐ฌ ๐ฆ๐๐ฒ ๐ก๐๐ฏ๐ ๐ฉ๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง๐ฌ ๐ข๐ง ๐ญ๐ก๐ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ข๐๐ฌ ๐๐ข๐ฌ๐๐ฎ๐ฌ๐ฌ๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ.
๐๐ก๐ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐๐จ๐ง๐ญ๐๐ข๐ง๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ ๐ข๐ฌ ๐ข๐ง๐ญ๐๐ง๐๐๐ ๐๐จ๐ซ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐ฉ๐ฎ๐ซ๐ฉ๐จ๐ฌ๐๐ฌ ๐จ๐ง๐ฅ๐ฒ ๐๐ง๐ ๐ฌ๐ก๐จ๐ฎ๐ฅ๐ ๐ง๐จ๐ญ ๐๐ ๐๐จ๐ง๐ฌ๐ญ๐ซ๐ฎ๐๐ ๐๐ฌ ๐ข๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐ ๐ญ๐จ ๐ฆ๐๐๐ญ ๐ญ๐ก๐ ๐ฌ๐ฉ๐๐๐ข๐๐ข๐ ๐ง๐๐๐๐ฌ ๐จ๐ ๐๐ง๐ฒ ๐ข๐ง๐๐ข๐ฏ๐ข๐๐ฎ๐๐ฅ ๐จ๐ซ ๐ฌ๐ข๐ญ๐ฎ๐๐ญ๐ข๐จ๐ง. ๐๐๐ฌ๐ญ ๐ฉ๐๐ซ๐๐จ๐ซ๐ฆ๐๐ง๐๐ ๐ข๐ฌ ๐ง๐จ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐ ๐จ๐ ๐๐ฎ๐ญ๐ฎ๐ซ๐ ๐ซ๐๐ฌ๐ฎ๐ฅ๐ญ๐ฌ.[...]
Offshore
โ Dimitry Nakhla | Babylon Capitalยฎ RT @DimitryNakhla: A quality valuation analysis on $MELI ๐ง๐ฝโโ๏ธ โขNTM P/E Ratio: 42.45x โข1-Year Mean: 47.73x As you can see, $MELI appears to be trading below fair value Going forward, investors can receive ~12% MORE inโฆ
๐๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐๐จ๐ง๐ญ๐๐ข๐ง๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ ๐ก๐๐ฌ ๐๐๐๐ง ๐จ๐๐ญ๐๐ข๐ง๐๐ ๐๐ซ๐จ๐ฆ ๐ฌ๐จ๐ฎ๐ซ๐๐๐ฌ ๐๐๐ฅ๐ข๐๐ฏ๐๐ ๐ญ๐จ ๐๐ ๐ซ๐๐ฅ๐ข๐๐๐ฅ๐, ๐๐ฎ๐ญ ๐ข๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐๐ ๐๐ฌ ๐ญ๐จ ๐๐จ๐ฆ๐ฉ๐ฅ๐๐ญ๐๐ง๐๐ฌ๐ฌ ๐จ๐ซ ๐๐๐๐ฎ๐ซ๐๐๐ฒ.
tweet
tweet
Offshore
Photo
โ Finding Compounders
Asked whether he considers himself a superinvestor, Schloss demurs: "Well, I don't like to lose money."
A Forbes article on Walter Schloss https://t.co/abPlbfkPzg
tweet
Asked whether he considers himself a superinvestor, Schloss demurs: "Well, I don't like to lose money."
A Forbes article on Walter Schloss https://t.co/abPlbfkPzg
tweet
Offshore
Photo
โ The Kobeissi Letter
BREAKING: Gold fund net inflows have hit a record $80 BILLION year-to-date.
This is 2 TIMES more than the previous high set in the full year 2020.
Investors are pouring money into gold at a record pace as the market uncertainty has skyrocketed.
As a result, gold prices have rallied 22% year-to-date and have outperformed every other major asset class.
Gold prices have also hit 52 all-time highs over the last year, posting the best streak in 12 years.
Gold is the global safe haven.
tweet
BREAKING: Gold fund net inflows have hit a record $80 BILLION year-to-date.
This is 2 TIMES more than the previous high set in the full year 2020.
Investors are pouring money into gold at a record pace as the market uncertainty has skyrocketed.
As a result, gold prices have rallied 22% year-to-date and have outperformed every other major asset class.
Gold prices have also hit 52 all-time highs over the last year, posting the best streak in 12 years.
Gold is the global safe haven.
tweet
Offshore
Photo
โ App Economy Insights
๐บ US TV Time March 2025:
Streaming 43.8% (+5.3pp Y/Y).
โข YouTube 12.0% (+2.3pp Y/Y).
โข Netflix 7.9% (-0.1pp Y/Y).
โข Disney apps 5.0% (+0.3pp Y/Y).
โข Prime Video 3.5% (+0.7pp Y/Y).
โข Roku Channel 2.2% (+0.8pp Y/Y).
$GOOG $NFLX $AMZN $DIS $ROKU
Source: Nielsen https://t.co/evseYPQB4V
tweet
๐บ US TV Time March 2025:
Streaming 43.8% (+5.3pp Y/Y).
โข YouTube 12.0% (+2.3pp Y/Y).
โข Netflix 7.9% (-0.1pp Y/Y).
โข Disney apps 5.0% (+0.3pp Y/Y).
โข Prime Video 3.5% (+0.7pp Y/Y).
โข Roku Channel 2.2% (+0.8pp Y/Y).
$GOOG $NFLX $AMZN $DIS $ROKU
Source: Nielsen https://t.co/evseYPQB4V
tweet
Offshore
Video
โ The All-In Podcast
Elon Musk: โ"Once you have general purpose humanoid robots and autonomous vehicles ... โthere's no actual limit to the size of the economy."
@elonmusk breaks down the amazing potential of AI plus robotics:
"I think that there's no actual limit to the size of the economy."
"Once you have general purpose humanoid robots and autonomous vehicles, you can build anything."
"The economy is really just the average productivity per person times number of people. That's the economy."
"And if you've got humanoid robots where there's no real limit on the number of humanoid robots, and they can operate very intelligently, then there's no meaningful limit to the economy."
"The good future of AI is one of immense prosperity, where there is an age of abundance, no shortage of goods and services, everyone can have whatever they want."
"Anything that is a manufactured good or provided service, with the advent of AI plus robotics, the cost of goods and services will trend to zero."
This is from Elon's amazing interview at the 2024 All-In Summit.
Apply for 2025: https://t.co/AWcgvLf2yZ
tweet
Elon Musk: โ"Once you have general purpose humanoid robots and autonomous vehicles ... โthere's no actual limit to the size of the economy."
@elonmusk breaks down the amazing potential of AI plus robotics:
"I think that there's no actual limit to the size of the economy."
"Once you have general purpose humanoid robots and autonomous vehicles, you can build anything."
"The economy is really just the average productivity per person times number of people. That's the economy."
"And if you've got humanoid robots where there's no real limit on the number of humanoid robots, and they can operate very intelligently, then there's no meaningful limit to the economy."
"The good future of AI is one of immense prosperity, where there is an age of abundance, no shortage of goods and services, everyone can have whatever they want."
"Anything that is a manufactured good or provided service, with the advent of AI plus robotics, the cost of goods and services will trend to zero."
This is from Elon's amazing interview at the 2024 All-In Summit.
Apply for 2025: https://t.co/AWcgvLf2yZ
tweet
Offshore
Photo
โ Finding Compounders
Warren Buffett mentions and praises Walter Schlossโ operational style in a letter to the Lantana Group. https://t.co/qP7HNlZQWq
tweet
Warren Buffett mentions and praises Walter Schlossโ operational style in a letter to the Lantana Group. https://t.co/qP7HNlZQWq
tweet