Geeknet (NASDAQ: GKNT) and MercadoLibre (NASDAQ:MELI) are both technology companies, but which is the better business? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, institutional ownership, earnings, profitability and dividends.

Institutional & Insider Ownership

85.8% of MercadoLibre shares are held by institutional investors. 0.4% of MercadoLibre shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

MercadoLibre pays an annual dividend of $0.60 per share and has a dividend yield of 0.2%. Geeknet does not pay a dividend. MercadoLibre pays out 18.4% of its earnings in the form of a dividend.

Profitability

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

Net Margins Return on Equity Return on Assets
Geeknet -20.58% -25.85% -19.84%
MercadoLibre 13.37% 37.59% 11.81%

Analyst Recommendations

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Geeknet 0 0 0 0 N/A
MercadoLibre 1 5 6 0 2.42

MercadoLibre has a consensus target price of $261.67, indicating a potential downside of 3.22%. Given MercadoLibre’s higher probable upside, analysts plainly believe MercadoLibre is more favorable than Geeknet.

Valuation and Earnings

This table compares Geeknet and MercadoLibre’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Geeknet N/A N/A N/A N/A N/A
MercadoLibre $1.08 billion 11.05 $249.48 million $3.26 82.93

MercadoLibre has higher revenue and earnings than Geeknet.

Summary

MercadoLibre beats Geeknet on 9 of the 10 factors compared between the two stocks.

Geeknet Company Profile

Geeknet, Inc. (Geeknet) sells collectibles, apparel, gadgets, electronics, toys and other retail products for technology enthusiasts and general consumers through the ThinkGeek Website and exclusive products to the Company’s wholesale channel customers. The Company has three segments: Website, Wholesale and ThinkGeek Solutions. The ThinkGeek Solutions segment has been aggregated into the Website segment. The Website segment sells geek-themed retail products and video game-themed merchandise through the ThinkGeek Website and through the ThinkGeek Solutions Web-stores. The Wholesale segment sells primarily exclusive GeekLabs (the in-house product development team) products to brick-and-mortar retailers. The Company along with its subsidiaries, operates a business aimed at the global geek community, which includes technology enthusiasts, pop-culture aficionados and other fans. ThinkGeek, Inc. and ThinkGeek Solutions, Inc. are its two wholly owned subsidiaries.

MercadoLibre Company Profile

MercadoLibre, Inc. is an e-commerce company. The Company enables commerce through its marketplace platform in Latin America, which is designed to provide users with a portfolio of services to facilitate commercial transactions. Its geographic segments are Brazil, Argentina, Mexico Venezuela and Other Countries (which includes Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Panama, Peru, Portugal, Guatemala, Bolivia, Paraguay, Uruguay and the United States of America). It also operates online commerce platforms in the Dominican Republic, Honduras, Nicaragua, Salvador, Panama, Bolivia, Guatemala, Paraguay and Portugal. It offers an ecosystem of six integrated e-commerce services: the MercadoLibre Marketplace, the MercadoLibre Classifieds Service, the MercadoPago payments solution, the MercadoLibre advertising program, the MercadoShops online Webstores solution and the MercadoEnvios shipping service.

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