Mercadolibre Inc (MELI) or eBay Inc (EBAY): Which Is a Better Pick?

eBay Inc (NASDAQ:EBAY) has also had success with its mobile apps and cutting competitors like Google out of the equation. Instead of heading to a search engine and looking for an item, eBay’s mobile apps allow consumers to start their search directly on eBay’s platform, bypassing Google completely and placing more ad revenue in eBay’s pocket. These changes are significant and paint an encouraging future, as more than 120 million users have downloaded the company’s apps.

With a P/E ratio around 25 and a profit margin of 17.7%, eBay Inc (NASDAQ:EBAY) offers profits at a reasonable price. While it has some exposure to unstable nations in Latin America, its U.S. operations are a powerful driver and make it a more stable investment.

Conclusion

MercadoLibre is an attractive company with strong growth, but its current valuation is too rich given the uncertainties it faces in Argentina and Venezuela. Amazon is a giant of the online world, but its low profits, falling free cash flow, and high valuation decrease its attractiveness. eBay is a better deal with a healthy profit margin, growing operations, and new ventures in the payments sphere.

The article MercadoLibre or eBay: Which Is a Better Pick? originally appeared on Fool.com and is written by Joshua Bondy.

Joshua Bondy has no position in any stocks mentioned. The Motley Fool recommends Amazon.com, eBay, and MercadoLibre. The Motley Fool owns shares of Amazon.com, eBay, and MercadoLibre.

Joshua is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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