Analyzing Yunji (NASDAQ:YJ) and MercadoLibre (NASDAQ:MELI)

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

Institutional and Insider Ownership

87.6% of MercadoLibre shares are owned by institutional investors. 0.3% of MercadoLibre shares are owned by insiders. Comparatively, 45.3% of Yunji shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and recommmendations for MercadoLibre and Yunji, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MercadoLibre	0	6	11	0	2.65
Yunji	1	0	0	0	1.00

MercadoLibre currently has a consensus price target of $2,272.00, suggesting a potential upside of 16.36%. Given MercadoLibre’s stronger consensus rating and higher probable upside, research analysts clearly believe MercadoLibre is more favorable than Yunji.

Valuation and Earnings

This table compares MercadoLibre and Yunji”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MercadoLibre	$28.89 billion	3.43	$2.00 billion	$36.77	53.10
Yunji	$45.33 million	0.30	-$19.06 million	($3.37)	-0.82

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

Volatility and Risk

MercadoLibre has a beta of 1.34, indicating that its stock price is 34% more volatile than the S&P 500. Comparatively, Yunji has a beta of 0.2, indicating that its stock price is 80% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
MercadoLibre	5.30%	26.54%	4.19%
Yunji	N/A	N/A	N/A

Summary

MercadoLibre beats Yunji on 13 of the 14 factors compared between the two stocks.

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.

About Yunji

Yunji Inc., together with its subsidiaries, operates a social e-commerce platform in the People's Republic of China. It offers a range of product categories that cater various daily needs of users and their households, including beauty and personal care, household goods, cloths, food and fresh produce, computer and electronics, apparel, bags and cases, baby and maternity products, and home appliances. The company was founded in 2015 and is headquartered in Hangzhou, the People's Republic of China.