Motley Fool Money
Two Growth Stocks Hit a Snag
Nov 7, 2024
Bill Mann, an insightful equity analyst, joins to dissect the recent earnings from MercadoLibre and Celsius. He highlights MercadoLibre’s impressive revenue growth but raises concerns about their expanding credit offerings and investment risks. The struggles of Celsius in the competitive energy drink market are also discussed, focusing on declining sales and evolving marketing strategies. Additionally, they explore Schwab's new 24-hour trading initiative and the complexities of after-hours stock trading, revealing unique market dynamics.
21:53
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Quick takeaways
- Mercado Libre's impressive revenue growth is overshadowed by concerns over its credit division's expansion impacting profitability and operating margins.
- Celsius faces a significant sales drop due to accounting practices and distributor inventory issues, yet shows resilience with international revenue growth amidst competitive challenges.
Deep dives
Mercado Libre's Growth and Challenges
Mercado Libre, the largest online marketplace in Latin America, reported robust revenue growth of 35% year-on-year, driven by increased consumer spending in Argentina. The company welcomed nearly 7 million new buyers, representing numbers higher than those during the pandemic's peak. However, concerns arose around the significant growth of its credit division and the associated margin erosion, as operating margins fell from 18% to approximately 10%. While the long-term vision for Mercado Pago aims to create value within its ecosystem, current market reactions suggest investors are wary of the potential impacts on profitability amidst aggressive credit expansion.
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