InnerWorkings (NASDAQ:INWK) & Mercadolibre (NASDAQ:MELI) Critical Analysis

InnerWorkings (NASDAQ:INWK) and Mercadolibre (NASDAQ:MELI) are both business services companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, earnings, analyst recommendations, valuation, profitability, dividends and institutional ownership.

Earnings and Valuation

This table compares InnerWorkings and Mercadolibre’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
InnerWorkings $1.12 billion 0.23 -$76.17 million ($0.08) -62.63
Mercadolibre $1.44 billion 17.10 -$36.58 million ($0.82) -604.01

Mercadolibre has higher revenue and earnings than InnerWorkings. Mercadolibre is trading at a lower price-to-earnings ratio than InnerWorkings, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

InnerWorkings has a beta of 1.33, suggesting that its stock price is 33% more volatile than the S&P 500. Comparatively, Mercadolibre has a beta of 1.61, suggesting that its stock price is 61% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings for InnerWorkings and Mercadolibre, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
InnerWorkings 0 0 2 0 3.00
Mercadolibre 1 4 11 0 2.63

InnerWorkings currently has a consensus price target of $6.00, suggesting a potential upside of 18.34%. Mercadolibre has a consensus price target of $660.87, suggesting a potential upside of 33.36%. Given Mercadolibre’s higher possible upside, analysts clearly believe Mercadolibre is more favorable than InnerWorkings.

Institutional and Insider Ownership

83.3% of InnerWorkings shares are held by institutional investors. Comparatively, 82.0% of Mercadolibre shares are held by institutional investors. 6.4% of InnerWorkings shares are held by company insiders. Comparatively, 0.4% of Mercadolibre shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares InnerWorkings and Mercadolibre’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
InnerWorkings -6.97% 0.15% 0.05%
Mercadolibre -5.87% -1.29% -0.55%

About InnerWorkings

InnerWorkings, Inc. provides marketing execution solutions in North America and internationally. The company's software applications and databases create an integrated solution that stores, analyzes, and tracks the production capabilities of its supplier network, as well as detailed pricing data. It offers outsourced print management solutions that encompass the design, sourcing, and delivery of printed marketing materials, including direct mail, in-store signage, and marketing collateral; and outsourced solutions for the design, sourcing, and delivery of branded merchandise and product packaging. The company also assists clients with the management of events, promotions spending, and related procurement needs; and designs, sources, and installs point of sale displays, permanent retail fixtures, and overall store design, as well as offers on-site outsourced creative studio, digital marketing, and on-demand creative services. In addition, it provides fulfillment and logistics services, such as kitting and assembly, inventory management, and pre-sorting postage. Further, the company offers creative services comprising copywriting, graphics and Website design, identity work and marketing collateral development, and image and print-ready page processing and proofing capability services. It serves corporate clients in a range of industries, such as retail, financial services, hospitality, consumer packaged goods, non-profits, healthcare, pharmaceuticals, food and beverage, broadcasting and cable, and transportation. The company was founded in 2001 and is headquartered in Chicago, Illinois.

About Mercadolibre

MercadoLibre, Inc. operates online commerce platforms in Latin America. It operates MercadoLibre Marketplace, an automated online commerce platform that enables businesses and individuals to list merchandise and conduct sales and purchases online; and MercadoPago FinTech, 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, and allows merchants to process transactions via their Websites and mobile apps, as well as in their brick-and-mortar stores through QR and mobile points of sale. The company also offers MercadoFondo, an asset management product; and MercadoCredito, a lending solution. In addition, it provides MercadoEnvios logistics solution, which offers its platform technological and operational integration services with third-party carriers and other logistics service providers, as well as fulfillment and warehousing services for sellers. Further, the company provides MercadoLibre Classifieds service that enables users to list their offerings related to motor vehicles, vessels, aircraft, and real estate and services outside the Marketplace platform. Additionally, it offers MercadoLibre Advertising platform, which enables retailers and various other consumer brands to promote their products and services on the Internet by providing branding and performance marketing solutions. The company also provides MercadoShops, a software-as-a-service hosted online store solution that enables users to set-up, manage, and promote their own Webstores. The company was founded in 1999 and is headquartered in Buenos Aires, Argentina.

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