Amazon and MercadoLibre: Promising Growth Stocks to Watch

Investors should consider Amazon and MercadoLibre's strong growth potential. Amazon's operating income has seen remarkable growth, while MercadoLibre boasts a significant revenue increase, indicating these stocks could provide impressive returns.

Date: 28-02-2025

AI Rating: 7

Amazon Analysis: Amazon has shown remarkable profitability and growth, with its operating income increasing from $37 billion in 2023 to $69 billion in 2024. This significant gain suggests an impressive margin improvement. The company is actively reducing operating costs, which may further enhance profitability.

Analysts anticipate an annual growth rate of 21% in earnings for Amazon over the upcoming years, hinting at a robust potential for investors. Furthermore, the stock's valuation appears attractive since the price-to-cash flow ratio is currently at 20, well below its 10-year average of 27, indicating a possible undervaluation.

MercadoLibre Analysis: MercadoLibre is experiencing rapid growth, reflected in its 56% year-over-year revenue increase in Q4 and a significant rise in unique buyers, which grew by 24%. This growth signifies that MercadoLibre still has room to expand, especially within the Latin American market.

The price-to-sales ratio of 5.4 is considerably lower than its 10-year average of 10.3, presenting an opportunity for a price correction that could result in value appreciation for shareholders. Given these factors, MercadoLibre's potential for impressive returns continues to look favorable.

Stocks: AMZN MELI