MercadoLibre (NASDAQ:MELI) and LightInTheBox (NYSE:LITB) Head-To-Head Review

LightInTheBox (NYSE:LITB) and MercadoLibre (NASDAQ:MELI) are both consumer discretionary companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, risk, valuation, dividends, analyst recommendations, earnings and institutional ownership.

Institutional & Insider Ownership

56.8% of LightInTheBox shares are held by institutional investors. Comparatively, 87.6% of MercadoLibre shares are held by institutional investors. 62.2% of LightInTheBox shares are held by company insiders. Comparatively, 0.3% of MercadoLibre shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares LightInTheBox and MercadoLibre”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LightInTheBox	$224.32 million	0.23	$8.28 million	$0.48	6.14
MercadoLibre	$28.89 billion	3.32	$2.00 billion	$36.77	51.40

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
LightInTheBox	3.91%	-231.00%	13.47%
MercadoLibre	5.30%	26.54%	4.19%

Risk and Volatility

LightInTheBox has a beta of 0.02, meaning that its stock price is 98% less volatile than the S&P 500. Comparatively, MercadoLibre has a beta of 1.31, meaning that its stock price is 31% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for LightInTheBox and MercadoLibre, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LightInTheBox	0	1	0	0	2.00
MercadoLibre	0	6	12	0	2.67

MercadoLibre has a consensus price target of $2,251.88, suggesting a potential upside of 19.16%. Given MercadoLibre’s stronger consensus rating and higher possible upside, analysts plainly believe MercadoLibre is more favorable than LightInTheBox.

Summary

MercadoLibre beats LightInTheBox on 12 of the 14 factors compared between the two stocks.

About LightInTheBox

LightInTheBox Holding Co., Ltd., together with its subsidiaries, operates as an online retailer that delivers products directly to its consumers worldwide. The company provides apparel products; and other general merchandise products, such as small accessories and gadgets, home garden, toys and hobbies, electronics and communication devices, and other products. It also offers supplier chain management, research and development, customer, marketing, warehouse management, local delivery, and fulfillment services, as well as engages in the product sourcing, marketing, and operation of its websites and mobile applications. The company provides its products through www.lightinthebox.com and www.ezbuy.sg, and other websites and mobile applications. LightInTheBox Holding Co., Ltd. was founded in 2007 and is based in Singapore.

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.