MercadoLibre, Inc. (MELI) Simple Excess Return Model - Discounting Cash Flows
MELI
MercadoLibre, Inc.
MELI (NASDAQ)

Estimated Value

USD

Market Price USD

* Values are not guaranteed, please do your own
research before making investment decisions.

Simple Excess Return Model

Used to estimate the value of companies that have reached maturity and earn stable excess returns with little to no high growth chance. Excess Return models are better suited to calculate the intrinsic value of a financial company than an enterprise valuation model (such as the Discounted Free Cash Flow Model).

See our GitHub Documentation

Interactive Assumptions

Discount Rate

Discount Rate

Discount Rate = Cost of Equity = Risk Free Rate + Beta * Market Premium

The cost of equity is the theoretical rate of return that an equity investment should generate. It is calculated using the CAPM formula.

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↳ Beta

Beta

Beta is a value that measures the price fluctuations (volatility) of a stock with respect to fluctuations in the overall stock market.

↳ Risk Free Rate

Risk-Free Rate

The risk-free rate represents the interest an investor would expect from an absolutely risk-free investment over a specified period of time. By default, it is equal to the current yield of the U.S. 10 Year Treasury Bond.

↳ Market Premium

Market Premium

Market risk premium represents the excess returns over the risk-free rate that investors expect for taking on the incremental risks connected to the equities market.

Return On Equity

Return on Equity

Return On Equity (ROE) is used to estimate the Earnings Per Share (EPS) expressed as a percentage of Book Value.

Growth In Perpetuity

Growth in Perpetuity

The rate at which the company's free cash flow is assumed to grow in perpetuity. By default, this is equal to the yield of the U.S. 10 Year Treasury Bond.

Historical Years

Historical Years

The number of historical years used to calculate averages for historical data.

Results

Estimated Value 208 USD
Book value of equity invested 98.7 USD
Next year's estimated book value 89.56 USD
Present value of future excess returns 109.3 USD
Excess Return per share 7.12 USD
Cost of Equity (the discount rate) 10.87%
Average historical Return on Equity 19.17%
Average historical Payout Ratio 12.69%
Payout Ratio used 77.31%
Risk Free Rate of the 10 Year U.S. Treasury Note 4.35%

Historical and Forecasted Data

Monetary values are in USD

amounts of USD except for #

2024 LTM 2025 2026 2027 2028 2029
Beginning Book Value 61.1 85.82 85.82 89.56 93.45 97.52 101.8
Ending Book Value 85.82 98.7 89.56 93.45 97.52 101.8 106.2
EPS 37.69 40.65 16.45 17.17 17.91 18.69 19.51
Return on Equity 62.23% 47.37% 19.17% 19.17% 19.17% 19.17% 19.17%
Dividend per Share
0.6 12.72 13.27 13.85 14.45 15.08
Retained Earnings
40.05 3.73 3.9 4.07 4.24 4.43
Equity Cost per Share 6.64 9.33 9.33 9.73 10.16 10.6 11.06
Cost of Equity 10.87% 10.87% 10.87% 10.87% 10.87% 10.87% 10.87%
Excess Return 31.05 31.33 7.12 7.43 7.76 8.09 8.45

amounts of USD except for #

Average LTM 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015
Net Income 506.4 2,061 1,911 987 482 83 -0.707 -172 -36.59 13.78 136.4 105.8
Total Equity 1,904 5,004 4,351 3,071 1,827 1,532 1,652 2,082 336.7 325.8 428.9 339.5
Return on Equity 19.17% 47.37% 62.23% 54.02% 31.47% 5.03% -0.034% -51.08% -11.23% 3.21% 40.17% 29.73%
Dividends Paid to Common Shareholders 25.03 30.42
26.49 18.19
Payout Ratio 12.69% 1.48%
19.42% 17.17%
Shares Outstanding 47.93 50.7 50.7 50.26 50.35 49.8 49.74 48.69 44.53 44.16 44.16 44.16
EPS 10.06 40.65 37.69 19.64 9.57 1.67 -0.014 -3.53 -0.82 0.31 3.09 2.4
Dividend per Share 0.537 0.6
0.6 0.412
Book Value 38.27 98.7 85.82 61.1 36.29 30.75 33.2 42.76 7.56 7.38 9.71 7.69
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Discounting Cash Flows

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