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MercadoLibre (MercadoLibre) Altman Z-Score : 4.75 (As of Jul. 22, 2024)


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What is MercadoLibre Altman Z-Score?

The Altman Z-Score is a model designed to predict the likelihood of a company going bankrupt within the next two years. Created by American finance professor Edward Altman in 1968, the model is specifically designed for publicly traded manufacturing companies with assets greater than $1 million.

Good Sign:

Altman Z-score of 4.75 is strong.

MercadoLibre has a Altman Z-Score of 4.75, indicating it is in Safe Zones. This implies the Altman Z-Score is strong.

The zones of discrimination were as such:

When Altman Z-Score <= 1.8, it is in Distress Zones.
When Altman Z-Score >= 3, it is in Safe Zones.
When Altman Z-Score is between 1.8 and 3, it is in Grey Zones.

The historical rank and industry rank for MercadoLibre's Altman Z-Score or its related term are showing as below:

MELI' s Altman Z-Score Range Over the Past 10 Years
Min: 3.18   Med: 6.91   Max: 11.37
Current: 4.75

During the past 13 years, MercadoLibre's highest Altman Z-Score was 11.37. The lowest was 3.18. And the median was 6.91.


MercadoLibre Altman Z-Score Historical Data

The historical data trend for MercadoLibre's Altman Z-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

MercadoLibre Altman Z-Score Chart

MercadoLibre Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Altman Z-Score
Get a 7-Day Free Trial Premium Member Only Premium Member Only 7.38 11.37 5.95 3.48 4.81

MercadoLibre Quarterly Data
Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24
Altman Z-Score Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 4.69 4.23 4.46 4.81 4.48

Competitive Comparison of MercadoLibre's Altman Z-Score

For the Internet Retail subindustry, MercadoLibre's Altman Z-Score, along with its competitors' market caps and Altman Z-Score data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


MercadoLibre's Altman Z-Score Distribution in the Retail - Cyclical Industry

For the Retail - Cyclical industry and Consumer Cyclical sector, MercadoLibre's Altman Z-Score distribution charts can be found below:

* The bar in red indicates where MercadoLibre's Altman Z-Score falls into.



MercadoLibre Altman Z-Score Calculation

Altman Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.

MercadoLibre's Altman Z-Score for today is calculated with this formula:

Z=1.2*X1+1.4*X2+3.3*X3+0.6*X4+1.0*X5
=1.2*0.1704+1.4*0.1178+3.3*0.1068+0.6*5.3376+1.0*0.8272
=4.75

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency. GuruFocus does not calculate Altman Z-Score when X4 or X5 value is 0.

Trailing Twelve Months (TTM) ended in Mar. 2024:
Total Assets was $19,062 Mil.
Total Current Assets was $15,505 Mil.
Total Current Liabilities was $12,256 Mil.
Retained Earnings was $2,245 Mil.
Pre-Tax Income was 481 + 230 + 531 + 472 = $1,714 Mil.
Interest Expense was -38 + -81 + -111 + -92 = $-322 Mil.
Revenue was 4333 + 4261 + 3760 + 3415 = $15,769 Mil.
Market Cap (Today) was $83,650 Mil.
Total Liabilities was $15,672 Mil.

* Note that for stock reported semi-annually or annually, GuruFocus uses latest annual data as the TTM data.

X1=Working Capital/Total Assets
=(Total Current Assets - Total Current Liabilities)/Total Assets
=(15505 - 12256)/19062
=0.1704

X2=Retained Earnings/Total Assets
=2245/19062
=0.1178

X3=Earnings Before Interest and Taxes/Total Assets
=(Pre-Tax Income - Interest Expense)/Total Assets
=(1714 - -322)/19062
=0.1068

X4=Market Value Equity/Book Value of Total Liabilities
=Market Cap/Total Liabilities
=83650.272/15672
=5.3376

X5=Revenue/Total Assets
=15769/19062
=0.8272

The zones of discrimination were as such:

Distress Zones - 1.81 < Grey Zones < 2.99 - Safe Zones

MercadoLibre has a Altman Z-Score of 4.75 indicating it is in Safe Zones.

Study by Altman found that companies that are in Distress Zone have more than 80% of chances of bankruptcy in two years.


MercadoLibre  (NAS:MELI) Altman Z-Score Explanation

X1: The Working Capital/Total Assets (WC/TA) ratio is a measure of the net liquid assets of the firm relative to the total capitalization. Working capital is defined as the difference between current assets and current liabilities. Ordinarily, a firm experiencing consistent operating losses will have shrinking current assets in relation to total assets. Altman found this one proved to be the most valuable liquidity ratio comparing with the current ratio and the quick ratio. This is however the least significant of the five factors.

X2: Retained Earnings/Total Assets: the RE/TA ratio measures the leverage of a firm. Retained earnings is the account which reports the total amount of reinvested earnings and/or losses of a firm over its entire life. Those firms with high RE, relative to TA, have financed their assets through retention of profits and have not utilized as much debt.

X3, Earnings Before Interest and Taxes/Total Assets (EBIT/TA): This ratio is a measure of the true productivity of the firm's assets, independent of any tax or leverage factors. Since a firm's ultimate existence is based on the earning power of its assets, this ratio appears to be particularly appropriate for studies dealing with corporate failure. This ratio continually outperforms other profitability measures, including cash flow.

X4, Market Value of Equity/Book Value of Total Liabilities (MVE/TL): The measure shows how much the firm's assets can decline in value (measured by market value of equity plus debt) before the liabilities exceed the assets and the firm becomes insolvent.

X5, Revenue/Total Assets (S/TA): The capital-turnover ratio is a standard financial ratio illustrating the sales generating ability of the firm's assets.

Read more about Altman Z-Score and the original research.


Be Aware

Altman Z-Score does not apply to financial companies.


MercadoLibre Altman Z-Score Related Terms

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MercadoLibre (MercadoLibre) Business Description

Address
WTC Free Zone, Dr. Luis Bonavita 1294, Of. 1733, Tower II, Montevideo, URY, 11300
MercadoLibre runs the largest e-commerce marketplace in Latin America, connecting a network of more than 148 million active users and 1 million active sellers as of the end of 2022 across an 18-country footprint. The company also operates a host of complementary businesses, with shipping solutions (Mercado Envios), a payment and financing operation (Mercado Pago and Mercado Credito), advertisements (Mercado Clics), classifieds, and a turnkey e-commerce solution (Mercado Shops) rounding out its arsenal. MercadoLibre generates revenue from final value fees, advertising royalties, payment processing, insertion fees, subscription fees, and interest income from consumer and small-business lending.
Executives
De La Serna Juan Martin officer: Executive VP Corporate Affairs AV. PTE. PERON 2375, LOTE MN04, PILAR, BUENOS AIRES C1 1629
Emiliano Calemzuk director C/O MERCADOLIBRE, INC., TRONADOR 4890, 8TH FLOOR, BUENOS AIRES C1 C1430DNN
Petroni Merhy Andrea Mayumi director HOUSE B, 32 STANLEY VILLAGE ROAD, STANLEY K3 000000
Marcelo Melamud officer: V. P. Chief Accounting Officer TRONADOR 4890, 8TH FLOOR, BUENOS AIRES C1 C1430DNN
Richard A Sanders director 80 PALL MALL, LONDON X0 SW1Y 5ES
Ariel Szarfsztejn officer: Executive VP - Commerce POSTA 4789, 6TH FLOOR, BUENOS AIRES C1 C1430CRG
Henrique Vasoncelos Dubugras director 1000 LAUREL WAY, BEVERLY HILLS CA 90210
Alejandro Nicolas Aguzin director ARIAS 3751, 7TH FLOOR, BUENOS AIRES C1 C1430DNN
Meyer Malka director 364 UNIVERSITY AVENUE, PALO ALTO CA 94301
Roberto Balls Sallouti director ARIAS 3751, 7TH FLOOR, BUENOS AIRES C1 C1 C1430CRG
Stelleo Tolda officer: Country Manager Brazil C/O MERCADOLIBRE, INC., TRONADOR 4890, 8TH FLOOR, BUENOS AIRES C1 C1430DNN
Ebay Inc 10 percent owner 2025 HAMILTON AVENUE, SAN JOSE CA 95125
Daniel Rabinovich officer: VP-Chief Technology Officer ARIAS 3751, 7TH FLOOR, BUENOS AIRES C1 C1430CRG
A Michael Spence director 121 INNOVATION DR STE 200, IRVINE CA 92612
Pedro Arnt officer: Executive VP and CFO ARIAS 3751, 7TH FLOOR, BUENOS AIRES C1 C1430CRG

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