Shopify (NYSE: SHOP) and MercadoLibre (NASDAQ:MELI) are both mid-cap computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, analyst recommendations, dividends, risk, earnings, valuation and institutional ownership.
MercadoLibre pays an annual dividend of $0.60 per share and has a dividend yield of 0.2%. Shopify does not pay a dividend. MercadoLibre pays out 19.9% of its earnings in the form of a dividend.
Insider & Institutional Ownership
54.1% of Shopify shares are owned by institutional investors. Comparatively, 84.6% of MercadoLibre shares are owned by institutional investors. 0.4% of MercadoLibre shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
This table compares Shopify and MercadoLibre’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Earnings and Valuation
This table compares Shopify and MercadoLibre’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Shopify||$389.33 million||22.15||-$35.35 million||($0.49)||-204.10|
|MercadoLibre||$844.40 million||14.17||$136.36 million||$3.01||89.99|
MercadoLibre has higher revenue and earnings than Shopify. Shopify is trading at a lower price-to-earnings ratio than MercadoLibre, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings and target prices for Shopify and MercadoLibre, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Shopify presently has a consensus target price of $99.70, suggesting a potential downside of 0.31%. MercadoLibre has a consensus target price of $267.42, suggesting a potential downside of 1.27%. Given Shopify’s higher probable upside, equities research analysts clearly believe Shopify is more favorable than MercadoLibre.
Risk & Volatility
Shopify has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500. Comparatively, MercadoLibre has a beta of 2.04, suggesting that its stock price is 104% more volatile than the S&P 500.
MercadoLibre beats Shopify on 11 of the 15 factors compared between the two stocks.
Shopify Inc. (Shopify) provides a cloud-based, multi-channel commerce platform designed for small and medium-sized businesses. The Company offers subscription solutions and merchant solutions. The Company’s software is used by merchants to run their business across all of their sales channels, including Web and mobile storefronts, physical retail locations, social media storefronts and marketplaces. The Shopify platform provides merchants with a single view of their business and customers across all of their sales channels and enables them to manage products and inventory, process orders and payments, ship orders, build customer relationships and leverage analytics and reporting all from one integrated back office. The Shopify platform includes a mobile-optimized checkout system, which is designed to enable merchants’ consumers to buy products over mobile Websites. Its merchants are able to offer their customers the ability to check out by using Apple Pay.
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.
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