EAT vs MELI

Restaurants · market cap $7.6b. 3% off the 52-week high of $182.20. Revenue growing +22%, comfortably above the S&P median. PEG 0.89 — paying under fair value for the growth rate. 18 sell-side analysts rate this a Buy with a mean 1-yr target of $185.89 (implying +5% upside).

FCF converts 109% of net income — earnings translate cleanly into cash, a sign that working capital and capex are well-disciplined.

D/E 4.31 is elevated — limits strategic flexibility and raises refinancing exposure if rates stay higher for longer.

Internet Retail · market cap $91.5b. Down 29% from 52-week high of $2548.50 — deep drawdown territory. Revenue growing +34% — in hypergrowth territory. 24 sell-side analysts rate this a Buy with a mean 1-yr target of $2,209 (implying +22% upside).

ROE 26% — top-decile capital efficiency. Either pricing leverage, low capital intensity, or aggressive buybacks; the durability story depends on which. Free cash flow runs well ahead of reported net income — non-cash charges (depreciation, intangible amortization) are holding down GAAP earnings while cash generation stays strong. $91.5b market cap gives the company enough scale to absorb fixed costs that subscale competitors can't, without yet being so large that growth has to come from acquisition.

Trailing P/E 48x sits well above the S&P median (~20x) — multiple compression is a real risk if revenue growth decelerates. E-commerce competition — Amazon, Walmart, Shein, and Temu have each forced the rest of the category to compete on price, fulfillment speed, or assortment; sustaining margins requires one of those being structurally defended.