MercadoLibre and PDD are two e-commerce giants with strong growth potential in different regions.

From Nasdaq: 2024-10-02 04:21:00

MercadoLibre and PDD are two rapidly growing e-commerce giants, with MercadoLibre dominating Latin America and PDD establishing a strong presence in China. Both stocks have seen significant surges since their debuts, with MercadoLibre soaring over 11,370% and PDD rallying more than 610%.

MercadoLibre operates in 18 countries across Latin America, focusing on Brazil, Mexico, and Argentina. PDD’s platform, Pinduoduo, is exclusive to China and offers an online agricultural platform alongside its marketplace services. PDD saw higher revenue growth rates than MercadoLibre, but with more volatility.

MercadoLibre’s revenue grew at a CAGR of 59% in USD terms from 2018 to 2023, while PDD’s revenue rose at a higher rate of 80% in RMB terms. Both companies experienced strong growth during the pandemic, but faced challenges as macro conditions shifted.

MercadoLibre became profitable in 2021 and saw a net income CAGR of 244% in USD terms. PDD turned profitable in 2021 as well, with a net income CAGR of 178% in RMB terms. Analysts expect both companies to see continued profit growth in the coming years.

MercadoLibre trades at about 42 times next year’s earnings, while PDD trades at only 10 times, making it potentially undervalued. PDD’s cheaper valuation, despite recent warnings of a slowdown and rising expenses, could make it a more attractive investment option at this time.

While the author personally owns shares of MercadoLibre, PDD’s current valuation and growth potential make it a compelling choice for investors seeking exposure to high-growth e-commerce stocks. Consider all factors carefully before making an investment decision in MercadoLibre or PDD.



Read more at Nasdaq: Best Stock to Buy Right Now: MercadoLibre vs. PDD Holdings