Contrasting MercadoLibre (NASDAQ:MELI) and Jumia Technologies (NYSE:JMIA)

Jumia Technologies (NYSE:JMIA) and MercadoLibre (NASDAQ:MELI) are both retail/wholesale companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, profitability, risk, analyst recommendations, valuation, institutional ownership and dividends.

Profitability

This table compares Jumia Technologies and MercadoLibre’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Jumia Technologies	-42.52%	-89.98%	-37.20%
MercadoLibre	8.52%	43.06%	7.57%

Volatility and Risk

Jumia Technologies has a beta of 2.68, meaning that its share price is 168% more volatile than the S&P 500. Comparatively, MercadoLibre has a beta of 1.49, meaning that its share price is 49% more volatile than the S&P 500.

Earnings & Valuation

This table compares Jumia Technologies and MercadoLibre”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Jumia Technologies	$167.49 million	8.74	-$99.09 million	N/A	N/A
MercadoLibre	$20.78 billion	6.04	$1.91 billion	$40.49	61.16

MercadoLibre has higher revenue and earnings than Jumia Technologies.

Institutional and Insider Ownership

16.5% of Jumia Technologies shares are owned by institutional investors. Comparatively, 87.6% of MercadoLibre shares are owned by institutional investors. 1.9% of Jumia Technologies shares are owned by company insiders. Comparatively, 0.3% of MercadoLibre shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings for Jumia Technologies and MercadoLibre, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Jumia Technologies	0	0	1	0	3.00
MercadoLibre	0	2	14	1	2.94

Jumia Technologies presently has a consensus price target of $15.00, indicating a potential upside of 25.52%. MercadoLibre has a consensus price target of $2,817.22, indicating a potential upside of 13.76%. Given Jumia Technologies’ stronger consensus rating and higher possible upside, analysts clearly believe Jumia Technologies is more favorable than MercadoLibre.

Summary

MercadoLibre beats Jumia Technologies on 8 of the 13 factors compared between the two stocks.

About Jumia Technologies

Jumia Technologies AG operates an e-commerce platform in West Africa, North Africa, East and South Africa, Europe, the United Arab Emirates, and internationally. The company’s platform consists of marketplace that connects sellers with customers; logistics service, which enables the shipment and delivery of packages from sellers to consumers; and payment service, which facilitates transactions to participants active on the company’s platform in selected markets under the JumiaPay name. Its marketplace offers various products in a range of categories, including phones, electronics, home and living, fashion, beauty, and fast-moving consumer goods; and various digital lifestyle services, such as utility bills payment, airtime recharge, gaming and entertainment, and transport ticketing, as well as financial services comprising micro-loans, insurance, and savings products. The company was formerly known as Africa Internet Holding GmbH and changed its name to Jumia Technologies AG in January 2019. Jumia Technologies AG was incorporated in 2012 and is headquartered in Berlin, Germany.

About MercadoLibre

MercadoLibre, Inc. operates online commerce platforms in the United States. It operates Mercado Libre Marketplace, an automated online commerce platform that enables businesses, merchants, and individuals to list merchandise and conduct sales and purchases digitally; and Mercado Pago FinTech platform, a financial technology solution platform, which facilitates transactions on and off its marketplaces by providing a mechanism that allows its users to send and receive payments online, as well as allows users to transfer money through their websites or on the apps. The company also offers Mercado Fondo that allows users to invest funds deposited in their Mercado Pago accounts; Mercado Credito, which extends loans to certain merchants and consumers; and Mercado Envios logistics solution that enables sellers on its platform to utilize third-party carriers and other logistics service providers, as well as fulfillment and warehousing services for sellers. In addition, it provides Mercado Libre Classifieds, an online classified listing service, where users can list and purchase motor vehicles, real estate, and services; Mercado Ads, an advertising platform, which enables large retailers and brands to promote their products and services on the web; and Mercado Shops, an online storefronts solution that enables users to set-up, manage, and promote their own digital stores. The company was incorporated in 1999 and is headquartered in Montevideo, Uruguay.