Mercadolibre (NASDAQ: MELI) and Secoo (NASDAQ:SECO) are both technology companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, profitability, dividends, analyst recommendations, valuation, risk and institutional ownership.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Mercadolibre and Secoo, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mercadolibre 1 5 7 0 2.46
Secoo 0 0 1 0 3.00

Mercadolibre currently has a consensus target price of $273.92, indicating a potential downside of 19.33%. Secoo has a consensus target price of $18.00, indicating a potential upside of 81.63%. Given Secoo’s stronger consensus rating and higher possible upside, analysts plainly believe Secoo is more favorable than Mercadolibre.

Earnings & Valuation

This table compares Mercadolibre and Secoo’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Mercadolibre $844.40 million 17.76 $136.36 million $3.01 112.81
Secoo $382.60 million 0.33 -$6.59 million N/A N/A

Mercadolibre has higher revenue and earnings than Secoo.

Dividends

Mercadolibre pays an annual dividend of $0.60 per share and has a dividend yield of 0.2%. Secoo does not pay a dividend. Mercadolibre pays out 19.9% of its earnings in the form of a dividend.

Profitability

This table compares Mercadolibre and Secoo’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mercadolibre 10.91% 34.78% 10.33%
Secoo N/A N/A N/A

Institutional & Insider Ownership

89.4% of Mercadolibre shares are held by institutional investors. Comparatively, 24.8% of Secoo shares are held by institutional investors. 0.4% of Mercadolibre shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Mercadolibre beats Secoo on 10 of the 13 factors compared between the two stocks.

About Mercadolibre

MercadoLibre, Inc. is an e-commerce company. The Company enables commerce through its marketplace platform in Latin America, which is designed to provide users with a portfolio of services to facilitate commercial transactions. Its geographic segments are Brazil, Argentina, Mexico Venezuela and Other Countries (which includes Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Panama, Peru, Portugal, Guatemala, Bolivia, Paraguay, Uruguay and the United States of America). It also operates online commerce platforms in the Dominican Republic, Honduras, Nicaragua, Salvador, Panama, Bolivia, Guatemala, Paraguay and Portugal. It offers an ecosystem of six integrated e-commerce services: the MercadoLibre Marketplace, the MercadoLibre Classifieds Service, the MercadoPago payments solution, the MercadoLibre advertising program, the MercadoShops online Webstores solution and the MercadoEnvios shipping service.

About Secoo

Secoo Holding Limited is an online integrated platform company. The Company offers an integrated online and offline shopping platform, which consists of its Secoo.com Website, mobile applications and offline experience centers. The Company offers a range of products including watches, bags, clothing, footwear, jewelry, accessories, menswear, children’s wear, sportswear, cosmetics and skin care, automobile, home goods, lifestyle services, lifestyle services and high-end Chinese original products. The Company’s online platform facilitates easy product selection, order processing and convenient payment methods, such as Secoo Check, which allows customers to make payments for its merchandise products in installments on its online platform directly.

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