Let's talk about the popular MercadoLibre, Inc. (NASDAQ:MELI). The company's shares saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$1,818 and falling to the lows of US$1,370. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether MercadoLibre's current trading price of US$1,370 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let's take a look at MercadoLibre's outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Is MercadoLibre Still Cheap?

According to our valuation model, MercadoLibre seems to be fairly priced at around 15.48% above our intrinsic value, which means if you buy MercadoLibre today, you'd be paying a relatively fair price for it. And if you believe that the stock is really worth $1186.56, there's only an insignificant downside when the price falls to its real value. Is there another opportunity to buy low in the future? Since MercadoLibre's share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What kind of growth will MercadoLibre generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let's also take a look at the company's future expectations. MercadoLibre's earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has already priced in MELI's positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven't considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you've been keeping tabs on MELI, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it's worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

It can be quite valuable to consider what analysts expect for MercadoLibre from their most recent forecasts. So feel free to check out our free graph representing analyst forecasts.

If you are no longer interested in MercadoLibre, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.