Mercadolibre (NASDAQ:MELI) and InnerWorkings (NASDAQ:INWK) are both retail/wholesale companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, risk, dividends, analyst recommendations, earnings and valuation.
Risk and Volatility
Mercadolibre has a beta of 1.63, meaning that its share price is 63% more volatile than the S&P 500. Comparatively, InnerWorkings has a beta of 1.36, meaning that its share price is 36% more volatile than the S&P 500.
Insider and Institutional Ownership
81.2% of Mercadolibre shares are held by institutional investors. Comparatively, 82.3% of InnerWorkings shares are held by institutional investors. 0.4% of Mercadolibre shares are held by insiders. Comparatively, 6.4% of InnerWorkings shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Earnings and Valuation
This table compares Mercadolibre and InnerWorkings’ gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Mercadolibre | $1.44 billion | 20.13 | -$36.58 million | ($0.82) | -710.98 |
| InnerWorkings | $1.12 billion | 0.23 | -$76.17 million | ($0.08) | -60.75 |
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.
Profitability
This table compares Mercadolibre and InnerWorkings’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Mercadolibre | -5.87% | -1.29% | -0.55% |
| InnerWorkings | -3.10% | 0.50% | 0.14% |
Analyst Recommendations
This is a breakdown of current ratings and target prices for Mercadolibre and InnerWorkings, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Mercadolibre | 1 | 4 | 11 | 0 | 2.63 |
| InnerWorkings | 0 | 0 | 2 | 0 | 3.00 |
Mercadolibre currently has a consensus target price of $657.20, indicating a potential upside of 12.73%. InnerWorkings has a consensus target price of $6.00, indicating a potential upside of 23.46%. Given InnerWorkings’ stronger consensus rating and higher possible upside, analysts plainly believe InnerWorkings is more favorable than Mercadolibre.
Summary
InnerWorkings beats Mercadolibre on 9 of the 14 factors compared between the two stocks.
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.
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.
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