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Mercadolibre (MELI) & WNS (WNS) Critical Review

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

Earnings & Valuation

This table compares Mercadolibre and WNS’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Mercadolibre $1.44 billion 15.94 -$36.58 million ($0.82) -619.18
WNS $758.00 million 3.57 $86.43 million $1.81 29.43

WNS has lower revenue, but higher earnings than Mercadolibre. Mercadolibre is trading at a lower price-to-earnings ratio than WNS, indicating that it is currently the more affordable of the two stocks.

Profitability

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

Net Margins Return on Equity Return on Assets
Mercadolibre -2.54% -13.47% -1.95%
WNS 12.52% 23.78% 15.70%

Institutional and Insider Ownership

91.1% of Mercadolibre shares are held by institutional investors. Comparatively, 84.7% of WNS shares are held by institutional investors. 0.3% of Mercadolibre shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and recommmendations for Mercadolibre and WNS, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mercadolibre 2 4 8 0 2.43
WNS 0 0 4 1 3.20

Mercadolibre currently has a consensus price target of $425.67, indicating a potential downside of 16.16%. WNS has a consensus price target of $61.60, indicating a potential upside of 15.64%. Given WNS’s stronger consensus rating and higher possible upside, analysts plainly believe WNS is more favorable than Mercadolibre.

Volatility & Risk

Mercadolibre has a beta of 2.21, suggesting that its stock price is 121% more volatile than the S&P 500. Comparatively, WNS has a beta of 1.08, suggesting that its stock price is 8% more volatile than the S&P 500.

Summary

WNS beats Mercadolibre on 8 of the 14 factors compared between the two stocks.

About Mercadolibre

MercadoLibre, Inc. hosts online commerce platforms in Latin America. It offers MercadoLibre Marketplace, an automated online commerce service for businesses and individuals to list items and conduct their sales and purchases online in a fixed-price or auction-based format. The company’s Marketplace platform enables commerce through online classifieds for motor vehicles, vessels, aircraft, services, and real estate; and Internet users to browse through various products that are listed on its Website and to register with MercadoLibre to list and purchase items and services. It also provides MercadoLibre Classifieds service that enables users to list their offerings related to motor vehicles, vessels, aircraft, real estate, and services outside the Marketplace platform; and MercadoPago, an integrated online payments solution to facilitate transactions on and off the MercadoLibre Marketplace by providing a mechanism that allows its users to send and receive payments online. In addition, the company offers MercadoLibre Advertising platform, which enables large retailers and various other consumer brands to promote their products and services on the Internet by providing branding and performance marketing services; and advertisers to place text, display, or banner advertisements in order to promote their brands and offerings on its Webpages and associated sites. Further, it provides MercadoShops, a software-as-a-service, hosted online store solution that enables users to set-up, manage, and promote their own Webstores; and MercadoEnvios, a shipping service for marketplace users. The company was founded in 1999 and is headquartered in Buenos Aires, Argentina.

About WNS

WNS (Holdings) Limited, a business process management company, together with its subsidiaries, provides data, voice, analytical, and business transformation services worldwide. It operates through two segments, WNS Global BPM and WNS Auto Claims BPM. The company offers industry-specific services to clients primarily in insurance; travel and leisure; diversified businesses, including manufacturing, retail, consumer packaged goods, media and entertainment, and telecommunication; utilities; consulting and professional services; healthcare; banking and financial services; and shipping and logistics industries. It also provides shared services, such as customer interaction, finance and accounting, research and analytics, technology, legal, and human resources outsourcing services. In addition, the company offers transformation services designed to help its clients to modify their business processes to enhance productivity, as well as manage changes in the business environment and leverage business knowledge to increase market competitiveness. Further, it provides claims handling and repair management services for automobile repairs through a network of third party repair centers; and a suite of accident management services, such as credit hire and credit repair. WNS (Holdings) Limited was founded in 1996 and is based in Mumbai, India.



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Source: on 2019-03-31 08:00:00

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