MercadoLibre dominates Latin American e-commerce, serving 85 million customers in 18 countries and selling 413 products in the 2023 fourth quarter. MercadoLibre continuously grows, and that was a 29% year-over-year rise. Fourth-quarter revenue rose 83% (currency neutral) over last year, accelerating.
With almost 50% of shipments on the MercadoLibre logistics network, more orders are delivered faster. Over 75% of shipments were delivered in 48 hours, which may be the fastest e-commerce times. Faster delivery wins customers' loyalty and business, increasing revenue and market share for MercadoLibre. It affects the bottom line. In 2023, net income doubled to $987 million.
Not to be overlooked is MercadoLibre's financial business, which is growing faster than e-commerce and has a bigger opportunity. In the fourth quarter, total payment volume (TPV) rose 153% to $56 billion, and off-platform TPV rose 182%. Credit, a fintech spinoff, saw a 33% increase in portfolio to $3.8 billion. Also boosts net income.
MercadoLibre stock fell after its fourth-quarter report because EPS missed Wall Street's forecasts. Their stock dropped due to a one-time tax expense that doesn't affect operations, and investors may be losing sight of the forest. That gives knowledgeable investors an opportunity, and MercadoLibre stock is showing a huge buy signal.
Consider John Ballard (Dutch Bros) as a promising restaurant investment, as small fast-growing franchises can yield significant gains. Today, a $1,000 Starbucks IPO investment is worth $273,000 (excluding dividends). Dutch Bros needn't become a global brand like Starbucks.
Dutch Bros' $254 million quarterly revenue across 16 states gives it a vast U.S. expansion runway. It's about the size of Starbucks in the 1990s, and its hot and cold drinks are selling well. In the latest quarter, system same-shop sales rose 5% and revenue rose 26%. It's a fraction of its potential size in the coming decades.
While maintaining breakeven, Dutch Bros is opening more stores. It's made a modest adjusted profit for the past year. But its low earnings is a stock catalyst. As it expands outside 16 states, its tiny profit margin might boost earnings over the next decade. Dutch Bros' company-owned stores have a 26% contribution margin.
At its 2021 IPO, the stock was costly despite sustained expansion, and it declined in 2022 as macroeconomic headwinds hindered same-shop sales. However, the stock seems good at a cheaper price. The stock is up 7% this year, but better profits might boost it further.
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