Mercari (MCARY) AI Stock Analysis

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Mercari

(OTC:MCARY)

Rating:72Outperform

Price Target:

$9.50

▲(2.81%Upside)

Mercari's overall score reflects strong financial performance with solid revenue growth and profitability. Technical indicators support a bullish outlook, although there are concerns about overbought conditions. Valuation aspects are moderate, with no dividend yield to attract income-seeking investors. The company's leverage and cash flow issues are notable risks.

Mercari (MCARY) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$3.03B

Dividend YieldN/A

Average Volume (3M)0.00

Price to Earnings (P/E)28.2

Beta (1Y)0.80

Revenue Growth-2.27%

EPS Growth-9.46%

CountryUS

Employees2,080

SectorConsumer Cyclical

Sector Strength58

IndustrySpecialty Retail

Share Statistics

EPS (TTM)0.09

Shares Outstanding328,948,900

10 Day Avg. Volume0

30 Day Avg. Volume0

Financial Highlights & Ratios

PEG Ratio-0.15

Price to Book (P/B)9.97

Price to Sales (P/S)0.00

P/FCF Ratio-14.59

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Mercari Business Overview & Revenue Model

Company DescriptionMercari, Inc. is a prominent e-commerce company headquartered in Japan, operating primarily in the online marketplace sector. The company provides a user-friendly platform that enables individuals to buy and sell a wide range of new and used items, including fashion, electronics, and household goods. Mercari's platform is accessible via its website and mobile applications, making it convenient for users to engage in consumer-to-consumer transactions.

How the Company Makes MoneyMercari makes money primarily through transaction fees on sales conducted through its platform. The company charges sellers a percentage of the selling price as a commission, which varies based on the market and specific items. Additionally, Mercari offers optional paid services to enhance listings, such as promotional tools that increase the visibility of items. The company also generates revenue from shipping services and partnerships with logistics providers, ensuring efficient delivery solutions for its users. Mercari's earnings are further supported by strategic collaborations and potential expansion into international markets.

Mercari Earnings Call Summary

Earnings Call Date:May 07, 2025

(Q2-2025)

% Change Since: 16.52%|

Next Earnings Date:Aug 05, 2025

Earnings Call Sentiment Neutral

The earnings call showcased significant growth in core operating profit and fintech segment performance, alongside successful product feature introductions. However, challenges in the U.S. market and lower-than-expected GMV growth in the marketplace segment present areas of concern. Overall, the sentiment is cautiously optimistic with strategies in place to address the lowlights.

Q2-2025 Updates

Positive Updates

Record-Breaking Core Operating Profit

Achieved record-breaking consolidated core operating profit of JPY 7 billion, up 79% year-on-year.

High Profitability Across Business Segments

Achieved high profitability for all three business pillars: marketplace, fintech, and U.S. Core operating profit grew year-on-year and quarter-on-quarter.

Fintech Growth

Credit balance in the fintech segment grew by 38% year-on-year to JPY 213.3 billion, with core operating profit reaching JPY 1.2 billion.

Reduction in U.S. Business Operating Losses

The U.S. business saw significant improvement in operating losses, landing at negative JPY 100 million, with December showing profitability.

Introduction of New Product Features

Introduced new features in the marketplace segment such as hassle-free car sales and C2B transaction capabilities, enhancing user engagement and app usage.

Negative Updates

Decline in U.S. GMV

The U.S. business experienced a significant GMV decline of 27% year-on-year, attributed to changes in service fees and buyer cost concerns.

Marketplace GMV Growth Below Expectations

Marketplace GMV growth was below initial expectations at 5% year-on-year, impacted by high temperatures and fraudulent use of services.

Challenges in Achieving GMV Growth Target

Facing challenges in achieving the GMV growth target of 10% year-on-year, with efforts focused on product improvements and security enhancements.

Company Guidance

In Mercari's FY 2025 second quarter earnings briefing, the company reported a strong financial performance with record-breaking consolidated core operating profit of JPY 7 billion, reflecting a 79% year-on-year increase. The revenue grew by 2% to JPY 49.2 billion, while the marketplace gross merchandise value (GMV) rose by 5% to JPY 296 billion. However, the U.S. business experienced a significant GMV decline of 27% year-on-year, finishing at USD 175 million, though core operating losses improved to negative JPY 100 million. The fintech segment showed robust growth, with a 38% increase in credit balance to JPY 213.3 billion and a core operating profit of JPY 1.2 billion. The company aims to maintain a core operating margin of 37% to 42% in the marketplace segment and achieve a core operating profit of JPY 3 billion in fintech. Despite challenges in meeting initial GMV growth targets, Mercari is committed to enhancing product offerings and achieving sustainable growth across its business segments.

Mercari Financial Statement Overview

Summary

Mercari shows strong revenue growth and profitability, with robust gross profit margins. However, significant operating expenses lower the net profit margin, and high leverage combined with cash flow challenges pose risks.

Income Statement

Positive

Mercari has shown a consistent revenue growth trajectory, with a 8.93% increase from 2023 to 2024. The gross profit margin is robust at approximately 69.2% in 2024, indicating strong profitability. However, the net profit margin is relatively lower at 7.18%, suggesting that operating expenses are significant. EBIT and EBITDA margins stand at 10.07% and 10.89%, respectively, showing operational efficiency but room for improvement in cost management.

Balance Sheet

Positive

The balance sheet reflects a strong equity position with a debt-to-equity ratio of 2.69, indicating moderate leverage. The return on equity (ROE) is healthy at 18.74%, showing effective utilization of equity. The equity ratio of 14.32% suggests a balanced capital structure, though there is potential risk due to significant liabilities relative to assets.

Cash Flow

Positive

Mercari's cash flow statement reveals challenges, with negative free cash flow growth, highlighting potential cash management issues. The operating cash flow to net income ratio is negative, indicating that operating activities are not generating sufficient cash relative to net income. However, the company has managed financing activities well, with significant cash reserves.

Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Breakdown
Income Statement		Total Revenue
187.41B	172.06B	147.05B	106.11B	76.28B
	Gross Profit
129.73B	114.42B	95.14B	81.80B	55.61B
	EBIT
18.87B	17.02B	-3.71B	5.18B	-19.31B
	EBITDA
20.42B	17.96B	-2.95B	6.03B	-18.63B
	Net Income Common Stockholders
13.46B	13.07B	-7.57B	5.72B	-22.77B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
197.31B	202.05B	211.41B	171.46B	141.01B
	Total Assets
501.77B	415.29B	339.86B	262.53B	198.01B
	Total Debt
193.31B	157.53B	131.35B	71.15B	52.45B
	Net Debt
-2.45B	-38.74B	-80.06B	-100.31B	-83.30B
	Total Liabilities
429.63B	360.06B	301.87B	222.52B	162.65B
	Stockholders Equity
71.84B	54.67B	37.68B	39.63B	34.78B
Cash Flow		Free Cash Flow
-43.49B	-37.35B	-26.89B	2.95B	11.76B
	Operating Cash Flow
-43.34B	-36.88B	-26.22B	3.37B	12.53B
	Investing Cash Flow
-877.00M	-632.00M	-671.00M	6.91B	-2.65B
	Financing Cash Flow
32.09B	26.84B	62.06B	19.77B	465.00M

Mercari Technical Analysis

Technical Analysis Sentiment

Positive

Last Price9.24

Price Trends

50DMA

8.14

Positive

100DMA

7.85

Positive

200DMA

7.47

Positive

Market Momentum

MACD

0.26

Negative

RSI

72.20

Negative

STOCH

93.01

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MCARY, the sentiment is Positive. The current price of 9.24 is above the 20-day moving average (MA) of 8.53, above the 50-day MA of 8.14, and above the 200-day MA of 7.47, indicating a bullish trend. The MACD of 0.26 indicates Negative momentum. The RSI at 72.20 is Negative, neither overbought nor oversold. The STOCH value of 93.01 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MCARY.

Mercari Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EBAY	77 Outperform	$35.82B	18.57	36.48%	1.49%	2.04%	-15.61%
MCARY	72 Outperform	$3.03B	28.17	21.33%	―	-2.27%	-9.46%
ETSY	68 Neutral	$5.62B	38.74	-39.97%	―	2.18%	-32.87%
TDUP	67 Neutral	$912.87M	―	-69.51%	―	-10.55%	9.27%
Sector *	62 Neutral	$6.86B	11.07	2.77%	4.27%	2.66%	-24.95%
RERE	61 Neutral	$619.92M	38.98	3.45%	―	25.34%	―
LOGC	41 Neutral	$215.06M	―	-14.89%	―	-84.75%	77.25%

* Consumer Cyclical Sector Average

Performance Comparison

MCARY

Mercari

9.24

2.99

47.84%

EBAY

eBay

77.53

24.62

46.53%

ETSY

Etsy

55.30

-2.90

-4.98%

LOGC

ContextLogic

7.52

1.95

35.01%

TDUP

thredUP

8.01

6.36

385.45%

RERE

ATRenew Inc. Sponsored ADR

2.83

0.74

35.41%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.