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MercadoLibre (NASDAQ:MELI | MELI Price Prediction) trades at $1,799.21 against a Wall Street consensus target of $2,214.88, an implied gap of roughly 23%. Scotiabank’s Hector Maya carries a Sector Outperform rating and $2,800 Street-high target on the stock, which implies roughly 55% upside, well above the 40% threshold that flags an outlier call.
MercadoLibre runs Latin America’s dominant e-commerce and fintech ecosystem, pairing the Mercado Libre marketplace with Mercado Pago payments, Mercado Envios logistics, advertising, and a fast-scaling credit card book. The stock sits on a bruised Q1 2026 print that has the market debating temporary land grab versus structural damage.
Margins Collapsed and the Market Reacted Violently Revenue hit $8.85 billion, up 49% year-over-year and beating the $8.32 billion consensus, but operating income fell 20% to $611 million, operating margin compressed roughly 600 basis points to 6.9%, and adjusted free cash flow flipped negative at -$56 million. Shares dropped 15.8% in the first week after the print.
Provisions for doubtful accounts more than doubled to $1.244 billion, and management disclosed it had extended average Brazilian loan terms from 5 months to 8 months while pushing into riskier borrower segments. Multiple law firms opened securities investigations, and the CFO signaled the aggressive investment posture would continue through 2026 with no near-term margin relief expected.
Why 20 of 24 Analysts Still Rate It Buy The bull case, most aggressively voiced by Maya, frames this as a deliberate margin reset that will reverse once the current investment cycle matures. MercadoLibre is spending near-term operating income to lower free-shipping thresholds, scale first-party retail, and issue credit cards at a pace that grew the portfolio 104% year-over-year to $6.6 billion. Maya argues that at $2,800 the stock trades at roughly 28x NTM EV/FCF, which underprices a company compounding revenue at 20% plus in a region where e-commerce penetration is still mid-teens.
Brazil revenue grew 55% year-over-year, Mexico 62%, advertising revenue 73%, and fintech assets under management 77% to nearly $20 billion. Coverage sits at 20 Buy, 4 Hold, 0 Sell, with Jefferies among recent upgraders and Daiwa the notable trim. Bulls want operating margin re-expansion visible by early 2027 as newer card cohorts season and shipping subsidies stop growing as a share of revenue.
The Peer Group Did Not Fall Together Sea (NYSE:SE) is off 17.79% year to date on the same reinvestment story inside its Monee fintech unit. At $104.88 against a $142.26 analyst target, upside runs about 36% behind 27 Buys and 2 Holds.
Nu Holdings (NYSE:NU), Mercado Pago’s most direct LatAm rival, has slipped 13.32% year to date after its own Q1 credit-provision spike. At $14.51 versus a $17.94 target, upside is roughly 24% with 19 Buys, 2 Holds, and 1 Sell.
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Amazon (NASDAQ:AMZN) is the exception, up 6.08% year to date on AWS strength. At $244.85 against a $312.87 target, upside is about 28% behind 62 Buy ratings and no Sells.
Across the four names, Scotiabank’s $2,800 MELI target remains the largest single upside call.
Where the Numbers Land Against the S&P 500 MELI is down 10.68% year to date and 24.55% over the past twelve months. The S&P 500 has climbed 9.6% year to date and 18.85% over the same year, so the stock trails the index by more than 20 percentage points YTD.
Consensus target of $2,214.88 implies about 23% upside; Maya’s $2,800 implies close to 55%. Coverage runs 24 analysts deep, institutional ownership sits at 87.62%, and the trailing P/E is roughly 48, leaving limited room for further margin misses.
My Take: Cautiously Constructive at Current Levels The bull path holds if operating margin bottoms within two quarters and Brazil credit provisions stabilize as the extended-duration loan book seasons. In that path, revenue keeps compounding above 40% and the multiple re-rates. Maya’s $2,800 simply requires the current investment cycle to prove out on schedule.
The bear path plays out if the loan-duration extension turns out to be underwriting drift to hit growth targets. Rising provisions, 8-month terms, and a softer Brazilian consumer would trap the business in a lower-margin profile, and at 48x earnings there is no cushion for that outcome.
My lean is cautiously constructive. The reinvestment metrics are landing, but I’d anchor closer to the consensus $2,214 target than to $2,800 until the next quarter confirms the credit book is behaving.
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Key Takeaways MercadoLibre's Q1 GMV rose 42% to $19 billion as items sold jumped 47% to 721.7 million.Brazil's FX-neutral GMV grew 38%, with items sold up 56% and unique buyers rising 32%.Mexico, Argentina and Chile posted FX-neutral GMV growth of 28%, 41% and 40%, respectively. MercadoLibre, Inc. (MELI - Free Report) demonstrated broad-based gross merchandise volume (GMV) growth across Latin America during the first quarter of 2026. Consolidated GMV reached $19 billion, representing a 42% year-over-year increase in U.S. dollars and 36% growth on a foreign-exchange-neutral basis, underscoring rising consumer engagement across the company’s commerce ecosystem. The increase was supported by a 47% year-over-year jump in total items sold to 721.7 million units.
Brazil, the company's largest market, spearheaded this growth as foreign-exchange-neutral GMV growth accelerated to 38% year over year. This performance marks a steady quarterly acceleration from the 30% growth recorded in the first quarter of 2025. Items sold in Brazil jumped 56% year over year, more than double the 25% growth recorded in the first quarter of 2025, while unique buyer growth in the country surged to 32%, the fastest pace in five years.
MELI attributed Brazil’s stronger performance to increased buyer activity following the lower free shipping threshold, which drove higher conversion, greater shopping frequency, stronger retention and record customer satisfaction. At the same time, daily active users grew faster than monthly active users.
The momentum extended across the region. Mexico generated 28% foreign-exchange-neutral GMV growth despite a tougher tax environment affecting smaller merchants, while Argentina posted 41% growth on top of a high comparison base. Chile also maintained strong momentum with 40% GMV growth, supported by higher free shipping penetration and faster delivery capabilities.
Management emphasized that these results demonstrate continued market share gains across key markets and reinforce the long-term opportunity as e-commerce adoption across Latin America remains well below more mature markets.
What the Latest Metrics Say About MercadoLibreMercadoLibre, which competes with Amazon.com, Inc. (AMZN - Free Report) and Sea Limited (SE - Free Report) , has seen its shares tumble 18.7% over the past six months compared with the industry’s 3% decline. While Amazon shares have jumped 2.7%, Sea Limited has fallen 16.7% in the aforementioned period.
Image Source: Zacks Investment Research
From a valuation standpoint, MercadoLibre's forward 12-month price-to-earnings (P/E) ratio is 35.17, higher than the industry average of 21.92. The stock is also trading above its 12-month median level of 34.46.
MercadoLibre is trading at a premium to Amazon (forward 12-month P/E of 25.53) and Sea Limited (20.96).
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for MercadoLibre’s current financial-year sales and earnings per share implies year-over-year growth of 39.7% and 4.1%, respectively. For the next fiscal year, the consensus estimate indicates a 26.6% rise in sales and 44.4% growth in earnings.
Image Source: Zacks Investment Research
MELI currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
An employee of e-commerce MercadoLibre works at the company's offices in Buenos Aires, Argentina September 6, 2024. REUTERS/Agustin Marcarian Purchase Licensing Rights, opens new tab
SANTIAGO, July 23 (Reuters) - E-commerce firm MercadoLibre (MELI.O), opens new tab has discussed a proposal with Chilean authorities to operate as a pharmacy in the country, a plan that would require a change in local regulations, records of meetings between the parties showed.
The move would mark the latest step by Uruguay-based MercadoLibre, once primarily a marketplace for external sellers, toward expanding its own retail operations while deepening its push into pharmacies after a similar pilot in Brazil.
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MercadoLibre, which operates across Latin America and is one of the region's largest firms by market capitalization, met with Chilean officials at least six times in the past year. Meeting minutes revealed MercadoLibre's previously unreported plan to operate an in-house and online-only pharmacy model in Chile.
The plan would expand the firm's Chile operations, where, as in Argentina, Mexico and other markets, MercadoLibre currently only sells medication from third-party retailers.
After hearing the plan, Chile's health ministry recommended that MercadoLibre seek a technical evaluation from the nation's Public Health Institute (ISP), since the proposal would require regulatory changes or reinterpretations, according to records from a January meeting.
ISP in a written response to a request for comment did not detail whether MercadoLibre had requested that evaluation. It said MercadoLibre currently does not have authorization to operate an in-house drugstore in Chile, and that current regulations do not allow for the operation of an online-only drugstore.
Chile's health ministry did not respond to requests for comment.
MercadoLibre said in a statement to Reuters that it was working to gradually expand its health offering, adapting to each market's regulatory framework. It declined to comment specifically on plans in Chile.
As part of a broader long-term business strategy, the firm has increased investment in its in-house retail operations in recent quarters, focusing on segments such as beauty and household appliances.
That strategy has pressured margins, causing the stock to tumble almost 11% so far this year to $1,799 each.
In Brazil, its biggest market, MercadoLibre bought a physical drugstore last year due to local rules requiring a brick-and-mortar presence for companies selling medicines. It began a pilot there in March selling over-the-counter medicines, promising delivery in an average of up to three hours. It has yet to expand outside of Sao Paulo.
The firm's pitch in Chile also included deliveries in "a few hours in some regions," according to minutes from a meeting in September.
Chile lags behind the company's largest markets of Brazil, Mexico and Argentina, but a successful rollout there could serve as a model for expansion across Latin America.
Reporting by Kylie Madry in Santiago and Andre Romani in Sao Paulo; Editing by Mark Porter
Our Standards: The Thomson Reuters Trust Principles., opens new tab
Kylie Madry is a headline news reporter covering business, politics and breaking news for all of Latin America. She's based out of the Reuters office in Mexico City, where she was previously a freelance journalist and translator working on award-winning podcasts, books about Mexico's drug lords and stories ranging from the fight for clean water to the millions spent on the city's surveillance system. Kylie is originally from Dallas, Texas.
Key Takeaways MercadoLibre's network topped 50 facilities and handled 55% of first-quarter 2026 shipments.Same- and next-day shipments rose 39% to 199 million, while network penetration reached 95.5%.Brazil shipping costs fell 17% as density, utilization, routing and technology improved efficiency. MercadoLibre, Inc.’s (MELI - Free Report) continues to fortify its competitive position in Latin America through strategic investments in its logistics infrastructure. The company’s managed fulfillment network has emerged as a primary engine driving operational efficiency and customer retention across key regional markets. Management described fulfillment as central to its competitive position because it enables end-to-end control of the shopping experience while improving service quality, customer satisfaction and conversion.
The network has expanded to more than 50 facilities and handled 55% of total shipments in the first quarter of 2026, while same- and next-day shipments climbed 39% year over year to 199 million, reflecting the company’s ability to process rapidly growing order volumes. The acceleration has been particularly notable in Brazil, where logistics investments continue to support marketplace expansion. Overall managed network penetration expanded to 95.5%, illustrating deep integration across seller channels.
The significance extends beyond speed. MercadoLibre emphasized that greater shipment density is steadily lowering unit shipping costs even as volumes continue to surge. Management highlighted a 17% year-over-year reduction in shipping costs in Brazil (in local currency), driven by better facility utilization, route optimization, technology improvements and greater use of its slow-shipping network.
These efficiency gains are helping offset the economics of expanded free-shipping initiatives while maintaining high service standards. Rather than viewing fulfillment as a cost center, MercadoLibre increasingly treats it as a structural advantage that strengthens buyer retention, improves seller competitiveness and expands e-commerce adoption across Latin America.
What the Latest Metrics Say About MercadoLibreMercadoLibre, which competes with Amazon.com, Inc. (AMZN - Free Report) and Sea Limited (SE - Free Report) , has seen its shares tumble 14.8% over the past six months compared with the industry’s 2.3% decline. While Amazon shares have jumped 3.5%, Sea Limited has fallen 14.9% in the aforementioned period.
Image Source: Zacks Investment Research
From a valuation standpoint, MercadoLibre's forward 12-month price-to-earnings (P/E) ratio is 35.66, higher than the industry average of 22.07. The stock is also trading above its 12-month median level of 34.46.
MercadoLibre is trading at a premium to Amazon (forward 12-month P/E of 25.82) and Sea Limited (21.26).
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for MercadoLibre’s current financial-year sales and earnings per share implies year-over-year growth of 39.7% and 4.1%, respectively. For the next fiscal year, the consensus estimate indicates a 26.6% rise in sales and 44.4% growth in earnings.
Image Source: Zacks Investment Research
MELI currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Alesco Advisors LLC An ESL Co purchased a new position in MercadoLibre, Inc. (NASDAQ:MELI – Free Report) in the 1st quarter, according to the company in its most recent disclosure with the SEC. The fund purchased 422 shares of the company’s stock, valued at approximately $730,000.
Other large investors have also bought and sold shares of the company. Laurel Wealth Advisors LLC bought a new stake in shares of MercadoLibre during the fourth quarter valued at approximately $26,000. Transamerica Financial Advisors LLC bought a new position in MercadoLibre in the 4th quarter valued at approximately $26,000. Purpose Unlimited Inc. bought a new position in MercadoLibre in the 4th quarter valued at approximately $28,000. Darwin Wealth Management LLC purchased a new stake in MercadoLibre during the 2nd quarter valued at $29,000. Finally, Curio Wealth LLC bought a new position in shares of MercadoLibre during the fourth quarter valued at $30,000. 87.62% of the stock is owned by hedge funds and other institutional investors.
Wall Street Analysts Forecast Growth Several equities analysts have issued reports on MELI shares. Daiwa Securities Group cut shares of MercadoLibre from a “buy” rating to a “hold” rating and set a $1,800.00 target price on the stock. in a research note on Friday, May 8th. Barclays lowered their price objective on shares of MercadoLibre from $2,500.00 to $2,300.00 and set an “overweight” rating on the stock in a research report on Monday, May 11th. Raymond James Financial set a $2,000.00 price target on MercadoLibre in a report on Friday, May 8th. UBS Group dropped their price target on MercadoLibre from $2,050.00 to $1,750.00 and set a “neutral” rating on the stock in a research note on Wednesday, May 13th. Finally, BTIG Research restated a “buy” rating and set a $2,150.00 price target on shares of MercadoLibre in a research note on Tuesday, June 2nd. One equities research analyst has rated the stock with a Strong Buy rating, eleven have assigned a Buy rating and six have assigned a Hold rating to the company. According to data from MarketBeat.com, MercadoLibre currently has an average rating of “Moderate Buy” and an average target price of $2,258.67.
Read Our Latest Research Report on MercadoLibre
MercadoLibre Stock Down 0.5% NASDAQ MELI opened at $1,822.65 on Wednesday. The stock’s 50-day moving average price is $1,692.28 and its 200-day moving average price is $1,818.66. The company has a quick ratio of 1.14, a current ratio of 1.16 and a debt-to-equity ratio of 0.63. MercadoLibre, Inc. has a 52 week low of $1,495.00 and a 52 week high of $2,548.50. The company has a market capitalization of $92.41 billion, a P/E ratio of 48.10, a price-to-earnings-growth ratio of 1.13 and a beta of 1.35.
MercadoLibre (NASDAQ:MELI – Get Free Report) last posted its quarterly earnings data on Thursday, May 7th. The company reported $8.23 earnings per share for the quarter, missing analysts’ consensus estimates of $8.75 by ($0.52). The company had revenue of $8.85 billion for the quarter, compared to analysts’ expectations of $8.29 billion. MercadoLibre had a net margin of 6.04% and a return on equity of 29.58%. The firm’s quarterly revenue was up 49.0% on a year-over-year basis. During the same period in the previous year, the firm earned $9.74 earnings per share. On average, equities research analysts predict that MercadoLibre, Inc. will post 41 earnings per share for the current year.
Insiders Place Their Bets In other news, Director Alejandro Nicolas Aguzin purchased 600 shares of the company’s stock in a transaction on Friday, May 22nd. The stock was acquired at an average cost of $1,655.93 per share, for a total transaction of $993,558.00. Following the completion of the transaction, the director directly owned 5,355 shares in the company, valued at $8,867,505.15. This trade represents a 12.62% increase in their position. The acquisition was disclosed in a legal filing with the SEC, which is available through the SEC website. 0.26% of the stock is owned by corporate insiders.
MercadoLibre Profile (Free Report)
MercadoLibre, Inc operates an integrated e-commerce and fintech ecosystem serving consumers and businesses across Latin America. The company provides an online marketplace that connects buyers and sellers for a wide range of goods and services, supported by tools for merchants, advertising, and classifieds. Over time MercadoLibre has expanded beyond its marketplace roots into complementary areas that support digital commerce end to end.
Key offerings include its marketplace platform and a suite of logistics and payment services.
Featured Articles Five stocks we like better than MercadoLibre Confidence Is Back, But Earnings Show the Consumer Is Being Picky AeroVironment’s Stock Is Down, But Drone Demand Is Taking Off 3M’s Redemption Arc: Can Q2 Earnings Change the Narrative? 3 Photonics Companies Making Quantum Tech Possible Want to see what other hedge funds are holding MELI? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for MercadoLibre, Inc. (NASDAQ:MELI – Free Report).
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Baader Bank Aktiengesellschaft trimmed its holdings in shares of MercadoLibre, Inc. (NASDAQ:MELI – Free Report) by 72.0% in the 1st quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission. The firm owned 525 shares of the company’s stock after selling 1,352 shares during the period. Baader Bank Aktiengesellschaft’s holdings in MercadoLibre were worth $908,000 at the end of the most recent quarter.
Several other large investors have also made changes to their positions in the business. Laurel Wealth Advisors LLC purchased a new position in shares of MercadoLibre during the fourth quarter worth $26,000. Transamerica Financial Advisors LLC purchased a new stake in MercadoLibre in the fourth quarter valued at $26,000. Purpose Unlimited Inc. purchased a new stake in MercadoLibre in the fourth quarter valued at $28,000. Darwin Wealth Management LLC acquired a new stake in MercadoLibre during the 2nd quarter worth about $29,000. Finally, Curio Wealth LLC acquired a new stake in MercadoLibre during the 4th quarter worth about $30,000. 87.62% of the stock is owned by hedge funds and other institutional investors.
Wall Street Analysts Forecast Growth Several brokerages have recently issued reports on MELI. JPMorgan Chase & Co. decreased their price objective on MercadoLibre from $2,100.00 to $1,900.00 and set a “neutral” rating for the company in a report on Wednesday, May 13th. Daiwa Securities Group lowered MercadoLibre from a “buy” rating to a “hold” rating and set a $1,800.00 target price on the stock. in a report on Friday, May 8th. Benchmark reduced their price target on MercadoLibre from $2,780.00 to $2,380.00 and set a “buy” rating for the company in a research report on Friday, May 8th. Raymond James Financial set a $2,000.00 price target on MercadoLibre in a report on Friday, May 8th. Finally, Morgan Stanley lowered their price objective on MercadoLibre from $2,600.00 to $2,450.00 and set an “overweight” rating on the stock in a research report on Monday, May 11th. One research analyst has rated the stock with a Strong Buy rating, eleven have assigned a Buy rating and six have assigned a Hold rating to the company. According to data from MarketBeat.com, MercadoLibre presently has a consensus rating of “Moderate Buy” and an average price target of $2,258.67.
View Our Latest Stock Report on MELI
MercadoLibre Price Performance NASDAQ:MELI opened at $1,822.65 on Wednesday. MercadoLibre, Inc. has a 52 week low of $1,495.00 and a 52 week high of $2,548.50. The company has a quick ratio of 1.14, a current ratio of 1.16 and a debt-to-equity ratio of 0.63. The stock has a market capitalization of $92.41 billion, a PE ratio of 48.10, a price-to-earnings-growth ratio of 1.13 and a beta of 1.35. The stock’s 50-day moving average price is $1,692.28 and its 200-day moving average price is $1,818.66.
MercadoLibre (NASDAQ:MELI – Get Free Report) last released its quarterly earnings results on Thursday, May 7th. The company reported $8.23 earnings per share for the quarter, missing analysts’ consensus estimates of $8.75 by ($0.52). MercadoLibre had a return on equity of 29.58% and a net margin of 6.04%.The business had revenue of $8.85 billion during the quarter, compared to analyst estimates of $8.29 billion. During the same period in the previous year, the company posted $9.74 EPS. The business’s revenue for the quarter was up 49.0% compared to the same quarter last year. As a group, equities analysts expect that MercadoLibre, Inc. will post 41 EPS for the current fiscal year.
Insider Transactions at MercadoLibre In related news, Director Alejandro Nicolas Aguzin purchased 600 shares of the company’s stock in a transaction that occurred on Friday, May 22nd. The shares were purchased at an average price of $1,655.93 per share, with a total value of $993,558.00. Following the purchase, the director owned 5,355 shares of the company’s stock, valued at $8,867,505.15. The trade was a 12.62% increase in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink. Corporate insiders own 0.26% of the company’s stock.
MercadoLibre Company Profile (Free Report)
MercadoLibre, Inc operates an integrated e-commerce and fintech ecosystem serving consumers and businesses across Latin America. The company provides an online marketplace that connects buyers and sellers for a wide range of goods and services, supported by tools for merchants, advertising, and classifieds. Over time MercadoLibre has expanded beyond its marketplace roots into complementary areas that support digital commerce end to end.
Key offerings include its marketplace platform and a suite of logistics and payment services.
Recommended Stories Five stocks we like better than MercadoLibre Confidence Is Back, But Earnings Show the Consumer Is Being Picky AeroVironment’s Stock Is Down, But Drone Demand Is Taking Off 3M’s Redemption Arc: Can Q2 Earnings Change the Narrative? 3 Photonics Companies Making Quantum Tech Possible
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Assetmark Inc. cut its stake in MercadoLibre, Inc. (NASDAQ:MELI – Free Report) by 12.8% in the 1st quarter, according to its most recent 13F filing with the Securities and Exchange Commission (SEC). The institutional investor owned 3,238 shares of the company’s stock after selling 477 shares during the period. Assetmark Inc.’s holdings in MercadoLibre were worth $5,599,000 at the end of the most recent quarter.
Other institutional investors have also recently modified their holdings of the company. Baillie Gifford & Co. increased its position in shares of MercadoLibre by 4.9% in the fourth quarter. Baillie Gifford & Co. now owns 3,481,563 shares of the company’s stock worth $7,012,773,000 after purchasing an additional 164,120 shares during the period. Capital Research Global Investors lifted its position in MercadoLibre by 22.5% during the fourth quarter. Capital Research Global Investors now owns 2,225,031 shares of the company’s stock worth $4,481,812,000 after purchasing an additional 408,939 shares during the period. Capital International Investors lifted its position in MercadoLibre by 7.3% during the fourth quarter. Capital International Investors now owns 1,725,125 shares of the company’s stock worth $3,474,880,000 after purchasing an additional 118,018 shares during the period. Price T Rowe Associates Inc. MD grew its stake in MercadoLibre by 9.5% during the fourth quarter. Price T Rowe Associates Inc. MD now owns 1,583,071 shares of the company’s stock worth $3,188,718,000 after buying an additional 137,100 shares in the last quarter. Finally, Janus Henderson Group PLC grew its stake in MercadoLibre by 26.4% during the fourth quarter. Janus Henderson Group PLC now owns 604,096 shares of the company’s stock worth $1,216,807,000 after buying an additional 126,294 shares in the last quarter. 87.62% of the stock is currently owned by institutional investors.
Insider Activity In other news, Director Alejandro Nicolas Aguzin purchased 600 shares of the company’s stock in a transaction dated Friday, May 22nd. The stock was bought at an average cost of $1,655.93 per share, for a total transaction of $993,558.00. Following the purchase, the director owned 5,355 shares of the company’s stock, valued at approximately $8,867,505.15. The trade was a 12.62% increase in their ownership of the stock. The purchase was disclosed in a filing with the Securities & Exchange Commission, which is available through the SEC website. Company insiders own 0.26% of the company’s stock.
MercadoLibre Trading Down 0.5% Shares of MercadoLibre stock opened at $1,822.65 on Wednesday. The firm’s 50 day moving average is $1,692.28 and its 200 day moving average is $1,818.66. The firm has a market capitalization of $92.41 billion, a PE ratio of 48.10, a price-to-earnings-growth ratio of 1.13 and a beta of 1.35. MercadoLibre, Inc. has a 1 year low of $1,495.00 and a 1 year high of $2,548.50. The company has a current ratio of 1.16, a quick ratio of 1.14 and a debt-to-equity ratio of 0.63.
MercadoLibre (NASDAQ:MELI – Get Free Report) last issued its quarterly earnings data on Thursday, May 7th. The company reported $8.23 EPS for the quarter, missing the consensus estimate of $8.75 by ($0.52). MercadoLibre had a net margin of 6.04% and a return on equity of 29.58%. The company had revenue of $8.85 billion during the quarter, compared to the consensus estimate of $8.29 billion. During the same period in the previous year, the company earned $9.74 EPS. MercadoLibre’s revenue for the quarter was up 49.0% on a year-over-year basis. Equities research analysts forecast that MercadoLibre, Inc. will post 41 earnings per share for the current fiscal year.
Analyst Upgrades and Downgrades Several research firms have commented on MELI. The Goldman Sachs Group set a $2,100.00 target price on shares of MercadoLibre in a report on Wednesday, May 13th. BTIG Research reiterated a “buy” rating and set a $2,150.00 price target on shares of MercadoLibre in a research report on Tuesday, June 2nd. Cantor Fitzgerald reduced their price target on shares of MercadoLibre from $2,400.00 to $2,350.00 and set an “overweight” rating on the stock in a research report on Tuesday, April 21st. Barclays lowered their price objective on shares of MercadoLibre from $2,500.00 to $2,300.00 and set an “overweight” rating for the company in a research report on Monday, May 11th. Finally, Citigroup upped their target price on MercadoLibre from $1,950.00 to $2,000.00 and gave the stock a “neutral” rating in a research note on Wednesday, July 15th. One investment analyst has rated the stock with a Strong Buy rating, eleven have issued a Buy rating and six have given a Hold rating to the company’s stock. Based on data from MarketBeat.com, MercadoLibre presently has an average rating of “Moderate Buy” and an average target price of $2,258.67.
View Our Latest Research Report on MELI
MercadoLibre Company Profile (Free Report)
MercadoLibre, Inc operates an integrated e-commerce and fintech ecosystem serving consumers and businesses across Latin America. The company provides an online marketplace that connects buyers and sellers for a wide range of goods and services, supported by tools for merchants, advertising, and classifieds. Over time MercadoLibre has expanded beyond its marketplace roots into complementary areas that support digital commerce end to end.
Key offerings include its marketplace platform and a suite of logistics and payment services.
Featured Articles Five stocks we like better than MercadoLibre Confidence Is Back, But Earnings Show the Consumer Is Being Picky AeroVironment’s Stock Is Down, But Drone Demand Is Taking Off 3M’s Redemption Arc: Can Q2 Earnings Change the Narrative? 3 Photonics Companies Making Quantum Tech Possible
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MercadoLibre (MELI 0.40%) has prospered by transforming e-commerce, fintech, and logistics within Latin America. Investors have bid its stock price dramatically higher since its 2007 debut, as the company brought online shopping, digital financial transactions, and improved logistics to the region.
Nonetheless, the market has punished MercadoLibre stock over the past year, and it now trades at a 30% discount to its 52-week high. Investors appeared to sour on the stock because its profit growth was not matching its robust revenue increases. While getting the earnings trajectory back on track will be a challenge, if it can increase its profit growth rate over the next five years, the stock price will likely soar.
Image source: The Motley Fool.
Profit challenges Two issues have weighed on MercadoLibre's bottom line: rising e-commerce competition and an alarming increase in non-performing loans.
E-commerce giants like Amazon and Sea Limited, as well as numerous smaller enterprises, have attempted to chip away at the company's regional dominance. MercadoLibre responded by lowering its threshold for free shipping and making other moves that squeezed its margins.
On the fintech side of the business, Mercado Pago has attempted to grow by making more loans. Unfortunately, that also meant taking on more risk, and a larger share of its borrowers have stopped servicing their loans. That required it to increase its provision for doubtful accounts by 106% year over year in the first quarter of 2026.
Indeed, its Q1 financials show the scope of the problem well. The company reported over $8.8 billion in revenue, a 49% increase from year-ago levels. However, its net income actually dropped by 16% to $417 million.
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How the stock can recover Still, investors need to keep its rapid revenue growth in mind, as the key to its profit recovery probably lies in addressing its rising expenses. In pursuit of that goal, MercadoLibre has made moves for which investors have likely not given it credit.
The company plans to make up for its lower margins by increasing sales volumes. That should help it grow profits, and perhaps it will experience less competitive pressure if it pushes some rivals out of its markets. Furthermore, it is trying to reduce the volume of bad loans it makes by using AI to rate would-be borrowers and by limiting loan amounts.
Moreover, its earnings multiple shows this recovery could take place. Currently, its P/E ratio is 49. While that is well above the S&P 500 average of 32, it is also a lower multiple than Amazon traded at during its years of faster revenue growth. Additionally, rising profits would lower its P/E ratio, which could serve as a catalyst to take the stock higher.
MercadoLibre's road to recovery Ultimately, MercadoLibre stock should soar again if it can return to robust profit growth.
Admittedly, rising e-commerce competition and an increase in bad loans have reduced its net income.
The company believes more growth will mitigate the declining margins in its retail business. Also, it has employed mitigation strategies to reduce the number of non-performing loans. If successful, that could mean profits rise at rates more in proportion to revenue growth.
Assuming investors can wait for this process to play out, they will likely see outsize returns over the next five years from this consumer discretionary stock.
Key Takeaways MercadoLibre issued 2.7 million cards in Q1 2026, lifting its card portfolio 104% to $6.6 billion.The card boosts marketplace conversion, GMV per user and transaction frequency through cross-selling.Its 15-90-day NPL ratio fell 80 basis points as expansion advanced in Mexico and Argentina. MercadoLibre, Inc. (MELI - Free Report) continues to deepen its ecosystem integration through its credit card business, which is emerging as a central driver of user engagement. During the first quarter of 2026, the company issued 2.7 million credit cards, expanding its credit card portfolio by 104% year over year to $6.6 billion. This growth brought credit card balances to 46% of the total credit portfolio, up from 42% in the prior-year period. Total payment volume for credit cards surged 90% year over year, while monthly active users increased 68%.
The credit card plays a strategic role in converting marketplace-only buyers into active fintech participants. Management emphasizes that this product strengthens the cross-sell flywheel by lifting marketplace conversion rates, boosting gross merchandise volume per user and increasing overall transaction frequency across the platform. Rich proprietary data from marketplace interactions allows the firm to enhance underwriting precision continuously. As a result, credit asset quality improved as the card’s 15-90-day non-performing loan ratio declined by 80 basis points year over year.
In Brazil, older cardholder cohorts are maturing steadily, helping offset the initial margin dilution associated with rapid card expansion. Based on predictable payback periods and solid credit performance, MercadoLibre is expanding credit card issuance in Mexico and scaling early-stage efforts in Argentina. By combining high consumer engagement with refined risk models, the credit card operation proves that fintech expansion directly reinforces core marketplace performance.
What the Latest Metrics Say About MercadoLibreMercadoLibre, which competes with Amazon.com, Inc. (AMZN - Free Report) and Sea Limited (SE - Free Report) , has seen its shares tumble 15% over the past six months compared with the industry’s 2.5% decline. While Amazon shares have jumped 6.6%, Sea Limited has fallen 14% in the aforementioned period.
Image Source: Zacks Investment Research
From a valuation standpoint, MercadoLibre's forward 12-month price-to-earnings (P/E) ratio stands at 35.89, higher than the industry’s ratio of 21.92. The stock is also trading above its 12-month median level of 34.46.
MercadoLibre is trading at a premium to Amazon (with a forward 12-month P/E ratio of 26.08) and Sea Limited (21.16).
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for MercadoLibre’s current financial-year sales and earnings per share implies year-over-year growth of 39.7% and 4.1%, respectively. For the next fiscal year, the consensus estimate indicates a 26.6% rise in sales and 44.4% growth in earnings.
Image Source: Zacks Investment Research
MELI currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Amova Asset Management Americas Inc. reduced its position in MercadoLibre, Inc. (NASDAQ:MELI – Free Report) by 6.1% in the first quarter, according to its most recent disclosure with the Securities and Exchange Commission (SEC). The fund owned 76,540 shares of the company’s stock after selling 4,933 shares during the quarter. MercadoLibre makes up about 1.9% of Amova Asset Management Americas Inc.’s holdings, making the stock its 16th largest position. Amova Asset Management Americas Inc. owned about 0.15% of MercadoLibre worth $132,277,000 at the end of the most recent reporting period.
Other hedge funds have also recently made changes to their positions in the company. Laurel Wealth Advisors LLC bought a new stake in shares of MercadoLibre in the fourth quarter valued at approximately $26,000. Transamerica Financial Advisors LLC purchased a new position in MercadoLibre in the 4th quarter valued at approximately $26,000. Purpose Unlimited Inc. bought a new stake in MercadoLibre during the 4th quarter valued at $28,000. Darwin Wealth Management LLC purchased a new stake in shares of MercadoLibre during the second quarter worth $29,000. Finally, Curio Wealth LLC bought a new position in shares of MercadoLibre in the fourth quarter worth $30,000. 87.62% of the stock is currently owned by institutional investors.
Wall Street Analyst Weigh In MELI has been the topic of a number of analyst reports. The Goldman Sachs Group set a $2,100.00 price objective on MercadoLibre in a research note on Wednesday, May 13th. Jefferies Financial Group raised shares of MercadoLibre from a “hold” rating to a “buy” rating and lowered their price target for the stock from $2,800.00 to $2,600.00 in a report on Tuesday, April 7th. Citigroup boosted their price objective on shares of MercadoLibre from $1,950.00 to $2,000.00 and gave the company a “neutral” rating in a research note on Wednesday, July 15th. Barclays lowered their target price on shares of MercadoLibre from $2,500.00 to $2,300.00 and set an “overweight” rating on the stock in a research note on Monday, May 11th. Finally, Weiss Ratings restated a “hold (c)” rating on shares of MercadoLibre in a research report on Thursday, July 2nd. One investment analyst has rated the stock with a Strong Buy rating, eleven have issued a Buy rating and six have issued a Hold rating to the company. Based on data from MarketBeat.com, MercadoLibre presently has an average rating of “Moderate Buy” and an average price target of $2,258.67.
Get Our Latest Stock Report on MercadoLibre
Insider Transactions at MercadoLibre In other MercadoLibre news, Director Alejandro Nicolas Aguzin purchased 600 shares of MercadoLibre stock in a transaction on Friday, May 22nd. The shares were acquired at an average cost of $1,655.93 per share, for a total transaction of $993,558.00. Following the completion of the transaction, the director directly owned 5,355 shares of the company’s stock, valued at approximately $8,867,505.15. The trade was a 12.62% increase in their ownership of the stock. The purchase was disclosed in a filing with the SEC, which is available through this hyperlink. 0.26% of the stock is currently owned by corporate insiders.
MercadoLibre Stock Up 1.0% MELI opened at $1,832.42 on Tuesday. The business’s fifty day simple moving average is $1,687.40 and its 200 day simple moving average is $1,820.01. MercadoLibre, Inc. has a 52 week low of $1,495.00 and a 52 week high of $2,548.50. The company has a quick ratio of 1.14, a current ratio of 1.16 and a debt-to-equity ratio of 0.63. The stock has a market cap of $92.90 billion, a PE ratio of 48.36, a P/E/G ratio of 1.12 and a beta of 1.35.
MercadoLibre (NASDAQ:MELI – Get Free Report) last issued its quarterly earnings results on Thursday, May 7th. The company reported $8.23 earnings per share (EPS) for the quarter, missing the consensus estimate of $8.75 by ($0.52). The firm had revenue of $8.85 billion for the quarter, compared to the consensus estimate of $8.29 billion. MercadoLibre had a return on equity of 29.58% and a net margin of 6.04%.The company’s revenue for the quarter was up 49.0% on a year-over-year basis. During the same period last year, the firm earned $9.74 EPS. As a group, research analysts expect that MercadoLibre, Inc. will post 41 earnings per share for the current fiscal year.
About MercadoLibre (Free Report)
MercadoLibre, Inc operates an integrated e-commerce and fintech ecosystem serving consumers and businesses across Latin America. The company provides an online marketplace that connects buyers and sellers for a wide range of goods and services, supported by tools for merchants, advertising, and classifieds. Over time MercadoLibre has expanded beyond its marketplace roots into complementary areas that support digital commerce end to end.
Key offerings include its marketplace platform and a suite of logistics and payment services.
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AIA Group Ltd trimmed its position in shares of MercadoLibre, Inc. (NASDAQ:MELI – Free Report) by 35.5% during the first quarter, according to its most recent disclosure with the Securities & Exchange Commission. The firm owned 6,371 shares of the company’s stock after selling 3,503 shares during the quarter. AIA Group Ltd’s holdings in MercadoLibre were worth $11,016,000 at the end of the most recent reporting period.
Other large investors also recently modified their holdings of the company. Brown Advisory Inc. increased its position in shares of MercadoLibre by 2,494.9% during the fourth quarter. Brown Advisory Inc. now owns 15,362 shares of the company’s stock valued at $30,943,000 after acquiring an additional 14,770 shares during the last quarter. Thompson Siegel & Walmsley LLC boosted its position in MercadoLibre by 238.3% in the fourth quarter. Thompson Siegel & Walmsley LLC now owns 2,030 shares of the company’s stock worth $4,089,000 after purchasing an additional 1,430 shares during the last quarter. TIAA Trust National Association boosted its position in MercadoLibre by 10.9% in the fourth quarter. TIAA Trust National Association now owns 11,011 shares of the company’s stock worth $22,179,000 after purchasing an additional 1,083 shares during the last quarter. Deepwater Asset Management LLC grew its stake in MercadoLibre by 38.6% in the 4th quarter. Deepwater Asset Management LLC now owns 7,765 shares of the company’s stock valued at $15,641,000 after purchasing an additional 2,164 shares during the period. Finally, Employees Retirement System of Texas grew its stake in MercadoLibre by 18.2% in the 4th quarter. Employees Retirement System of Texas now owns 40,184 shares of the company’s stock valued at $80,941,000 after purchasing an additional 6,200 shares during the period. 87.62% of the stock is currently owned by institutional investors.
Insider Activity In other news, Director Alejandro Nicolas Aguzin acquired 600 shares of the business’s stock in a transaction dated Friday, May 22nd. The stock was bought at an average cost of $1,655.93 per share, for a total transaction of $993,558.00. Following the completion of the transaction, the director owned 5,355 shares of the company’s stock, valued at $8,867,505.15. The trade was a 12.62% increase in their ownership of the stock. The purchase was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this link. Insiders own 0.26% of the company’s stock.
MercadoLibre Trading Down 2.3% Shares of MELI stock opened at $1,813.91 on Friday. The company’s fifty day simple moving average is $1,681.90 and its two-hundred day simple moving average is $1,822.69. The company has a debt-to-equity ratio of 0.63, a current ratio of 1.16 and a quick ratio of 1.14. MercadoLibre, Inc. has a 1 year low of $1,495.00 and a 1 year high of $2,548.50. The stock has a market capitalization of $91.97 billion, a price-to-earnings ratio of 47.87, a PEG ratio of 1.12 and a beta of 1.35.
MercadoLibre (NASDAQ:MELI – Get Free Report) last issued its earnings results on Thursday, May 7th. The company reported $8.23 EPS for the quarter, missing the consensus estimate of $8.75 by ($0.52). The company had revenue of $8.85 billion during the quarter, compared to the consensus estimate of $8.29 billion. MercadoLibre had a return on equity of 29.58% and a net margin of 6.04%.The firm’s revenue for the quarter was up 49.0% compared to the same quarter last year. During the same quarter in the prior year, the business earned $9.74 EPS. As a group, analysts anticipate that MercadoLibre, Inc. will post 41 earnings per share for the current year.
Analyst Ratings Changes A number of equities research analysts have recently commented on MELI shares. Daiwa Securities Group cut MercadoLibre from a “buy” rating to a “hold” rating and set a $1,800.00 target price on the stock. in a research note on Friday, May 8th. JPMorgan Chase & Co. reduced their price target on shares of MercadoLibre from $2,100.00 to $1,900.00 and set a “neutral” rating for the company in a research report on Wednesday, May 13th. Zacks Research upgraded shares of MercadoLibre from a “strong sell” rating to a “hold” rating in a report on Monday, July 13th. Benchmark lowered their price objective on shares of MercadoLibre from $2,780.00 to $2,380.00 and set a “buy” rating on the stock in a research report on Friday, May 8th. Finally, Cantor Fitzgerald dropped their target price on shares of MercadoLibre from $2,400.00 to $2,350.00 and set an “overweight” rating on the stock in a research note on Tuesday, April 21st. One research analyst has rated the stock with a Strong Buy rating, eleven have given a Buy rating and six have assigned a Hold rating to the stock. According to MarketBeat, the stock has a consensus rating of “Moderate Buy” and an average target price of $2,258.67.
View Our Latest Research Report on MercadoLibre
MercadoLibre Profile (Free Report)
MercadoLibre, Inc operates an integrated e-commerce and fintech ecosystem serving consumers and businesses across Latin America. The company provides an online marketplace that connects buyers and sellers for a wide range of goods and services, supported by tools for merchants, advertising, and classifieds. Over time MercadoLibre has expanded beyond its marketplace roots into complementary areas that support digital commerce end to end.
Key offerings include its marketplace platform and a suite of logistics and payment services.
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MercadoLibre (MELI - Free Report) ended the recent trading session at $1,813.91, demonstrating a -2.34% change from the preceding day's closing price. This change lagged the S&P 500's daily loss of 1.01%. Elsewhere, the Dow lost 0.77%, while the tech-heavy Nasdaq lost 1.4%.
Heading into today, shares of the operator of an online marketplace and payments system in Latin America had gained 13.59% over the past month, outpacing the Retail-Wholesale sector's gain of 0.78% and the S&P 500's gain of 0.32%.
Analysts and investors alike will be keeping a close eye on the performance of MercadoLibre in its upcoming earnings disclosure. The company is forecasted to report an EPS of $8.69, showcasing a 15.71% downward movement from the corresponding quarter of the prior year. Meanwhile, our latest consensus estimate is calling for revenue of $9.77 billion, up 43.9% from the prior-year quarter.
For the full year, the Zacks Consensus Estimates are projecting earnings of $41 per share and revenue of $40.36 billion, which would represent changes of +4.06% and +39.68%, respectively, from the prior year.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for MercadoLibre. These recent revisions tend to reflect the evolving nature of short-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.07% higher within the past month. MercadoLibre presently features a Zacks Rank of #2 (Buy).
Digging into valuation, MercadoLibre currently has a Forward P/E ratio of 45.31. This valuation marks a premium compared to its industry average Forward P/E of 17.3.
We can also see that MELI currently has a PEG ratio of 1.14. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Internet - Commerce industry currently had an average PEG ratio of 1.1 as of yesterday's close.
The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 170, finds itself in the bottom 31% echelons of all 250+ industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.
Investors interested in stocks from the Internet - Commerce sector have probably already heard of Maplebear (CART) and MercadoLibre (MELI). But which of these two companies is the best option for those looking for undervalued stocks?
Key Takeaways MELI gained 12.8% in a month, topping its industry and Amazon but trailing Sea Limited.MercadoLibre's logistics, fintech, AI and advertising investments are deepening customer engagement.MELI trades above its 50-day average, while earnings estimates point to stronger growth next year. MercadoLibre, Inc. (MELI - Free Report) shares have risen over the past month, reflecting renewed investor confidence in the Latin American e-commerce and fintech leader. The rally has been supported by accelerating revenue growth, robust user engagement, and management's confidence in its long-term investment strategy, even as the company continues to prioritize market-share gains over near-term margin expansion. The recent move raises an important question for investors: after the stock's sharp run-up, does MercadoLibre still offer meaningful upside?
The company's growth continues to be supported by commerce, payments, digital banking, advertising and logistics businesses. Strategic investments in free shipping, fulfillment infrastructure, artificial intelligence, cross-border trade and the Mercado Pago credit card are driving higher customer engagement, accelerated transaction volumes and an expanding competitive moat across Latin America. Although these investments are temporarily weighing on margins, MercadoLibre chose to maintain a bold investment posture to fortify long-term market leadership.
MELI closed yesterday’s trading session at $1,843.19, marking a 12.8% gain over the past month and outperforming the industry’s 5.4% advance. During the same period, MercadoLibre also delivered stronger returns than Amazon.com, Inc. (AMZN - Free Report) , although it trailed Sea Limited (SE - Free Report) . While shares of Amazon have jumped 7.4%, those of Sea Limited have rallied 22.7%.
MELI Past Month Stock Performance
Image Source: Zacks Investment Research
What’s Behind MELI’s Stock Momentum?MercadoLibre has evolved far beyond an online marketplace into Latin America's most comprehensive digital commerce and financial services ecosystem. The company combines e-commerce, digital payments, consumer and merchant lending, advertising, logistics, and savings and investment solutions on a single platform, creating multiple growth engines that reinforce one another. Rather than maximizing near-term profits, management continues to invest aggressively to expand this ecosystem, believing that stronger customer engagement today will translate into higher cash generation and profitability over the long run.
One of MercadoLibre's biggest competitive advantages is its deeply integrated commerce platform. Continuous investments in fulfillment infrastructure, free shipping, first-party retail operations, and cross-border trade have strengthened product selection, improved delivery speeds, and enhanced the overall customer experience. These initiatives encourage shoppers to purchase more frequently while attracting additional merchants to the platform, creating a virtuous cycle that is difficult for competitors to replicate. Management views logistics as a long-term competitive moat that supports higher customer retention and reinforces its leadership position across Latin America.
Mercado Pago is another powerful reason to own the stock. What began as a payments solution has expanded into a full-fledged digital banking platform offering payments, savings, investments, credit cards, and lending products. The company continues to deepen customer relationships by cross-selling financial services to marketplace users, allowing engagement in one business to fuel growth in another. Management also believes its proprietary transaction data enables better underwriting decisions, supporting disciplined expansion of its credit portfolio while strengthening customer loyalty and increasing lifetime value.
Another key strength is MercadoLibre's relentless focus on innovation. Artificial intelligence is now embedded across both its commerce and fintech operations, improving product discovery, advertising effectiveness, logistics efficiency and customer service. AI-powered search is helping shoppers find more relevant products, while intelligent tools are increasing productivity for employees and merchants alike. At the same time, the company's rapidly growing advertising business is emerging as an attractive high-margin revenue stream, leveraging first-party customer data and high marketplace traffic to attract greater marketing spending from sellers.
The combination of a rapidly expanding ecosystem, disciplined execution, and continued investment in innovation leaves MercadoLibre well-positioned to strengthen its competitive advantage as digital commerce and financial services continue to evolve across Latin America.
Can MELI Stock Rally Continue?While the fundamental story remains encouraging, the stock’s recent move also warrants a look at its technical setup. Momentum indicators can help investors assess whether MercadoLibre's rally is still supported by market strength, or if the stock may be approaching a pause after its sharp advance.
MercadoLibre's technical setup remains supportive, with the stock trading above its 50-day moving average of $1,686.72, signaling strong near-term momentum.
Image Source: Zacks Investment Research
Does MELI's Premium Valuation Look Justified?From a valuation standpoint, MercadoLibre's forward 12-month price-to-earnings (P/E) ratio stands at 35.89, higher than the industry’s ratio of 21.95. The stock is also trading above its 12-month median level of 34.46.
MercadoLibre is trading at a premium to Amazon (with a forward 12-month P/E ratio of 26.76) and Sea Limited (22.39).
The premium multiple appears justified by MercadoLibre's integrated ecosystem, expanding customer engagement, and management's willingness to invest in opportunities that can strengthen its competitive position and support higher cash generation over the long term.
Image Source: Zacks Investment Research
How Are MercadoLibre's Earnings Estimates Trending?The Zacks Consensus Estimate for MercadoLibre’s current financial-year sales and earnings per share implies year-over-year growth of 39.7% and 4.1%, respectively. For the next fiscal year, the consensus estimate indicates a 26.6% rise in sales and 46.9% growth in earnings.
Image Source: Zacks Investment Research
Should You Buy MercadoLibre Stock?MercadoLibre continues to strengthen its leadership position across Latin America's e-commerce and digital financial services markets through disciplined investments in logistics, fintech, artificial intelligence and customer engagement. Although the stock trades at a premium valuation and near-term margins are likely to remain under pressure as the company continues investing for growth, its differentiated ecosystem, expanding competitive moat and long-term growth opportunities support a favorable investment outlook. Existing shareholders may consider holding the stock, while prospective investors seeking exposure to a high-quality, long-duration growth story may view MELI as a compelling investment opportunity.
MercadoLibre stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Key Takeaways MercadoLibre's first-quarter operating margin fell to 6.9% as it prioritized long-term expansion.Lower free-shipping thresholds helped Brazil's GMV grow 38% and items sold surge 56%.MELI's credit portfolio jumped 87% to $14.6B, while 2.7 million cards were issued in the quarter. MercadoLibre, Inc. (MELI - Free Report) is prioritizing long-term market expansion over near-term margin optimization. During the first quarter of 2026, operating margin fell to 6.9% from 12.9% a year earlier, while net income margin declined to 4.7% from 8.3%. Management made it clear that this was not an accidental cost overrun but the result of funding initiatives that are already producing stronger demand, engagement and scale. Net revenues and financial income surged 49% year over year, the fastest pace in nearly four years. Instead of maximizing near-term profitability, management is stepping up investments across its commerce and fintech businesses.
Management believes Latin America still offers a significant growth opportunity. For instance, the average Latin American makes just seven online purchases a year compared with 41 in the United States. To capture this opportunity, MercadoLibre is investing heavily in lowering free shipping thresholds, expanding its fulfillment network, scaling first-party selection, growing cross-border trade and accelerating its credit card business across Brazil, Mexico and Argentina.
The lower free-shipping threshold in Brazil has reduced shipping monetization and weighed on gross margin, but it has also driven stronger buyer acquisition and purchasing frequency. Brazil's FX-neutral gross merchandise volume growth accelerated to 38% in the first quarter from 35% in the preceding quarter, while items sold surged 56%, up from 45% in the fourth quarter and 42% in the third quarter of 2025. Brazil also added a record 17 million unique active buyers year over year, helping MercadoLibre's total unique active buyers increase 26%.
Fintech adds another layer of pressure. MercadoLibre's credit portfolio jumped 87% year over year to $14.6 billion, while it issued 2.7 million credit cards during the quarter. Credit card payment volume rose 90%, and monthly active credit card users increased 68%. However, newly issued cards require higher upfront provisions before they become profitable, putting pressure on current earnings. Even so, management said improving performance of older credit card cohorts in Brazil and healthy repayment trends give it the confidence to continue expanding its credit card business in Mexico and Argentina.
Management emphasized that improving margins in the short term would be relatively easy by slowing investments. However, it believes doing so would sacrifice a much larger opportunity. MercadoLibre is choosing to maintain a bold investment posture to strengthen its ecosystem, expand its user base and build durable competitive advantages that can support stronger profitability over time.
What the Latest Metrics Say About MercadoLibreMercadoLibre, which competes with Amazon.com, Inc. (AMZN - Free Report) and Sea Limited (SE - Free Report) , has seen its shares tumble 9.7% over the past six months compared with the industry’s 2.9% decline. While shares of Amazon have jumped 3.5%, those of Sea Limited have fallen 10% in the aforementioned period.
Image Source: Zacks Investment Research
From a valuation standpoint, MercadoLibre's forward 12-month price-to-earnings (P/E) ratio stands at 36.53, higher than the industry’s ratio of 21.94. The stock is also trading above its 12-month median level of 34.46.
MercadoLibre is trading at a premium to Amazon (with a forward 12-month P/E ratio of 25.98) and Sea Limited (21.99).
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for MercadoLibre’s current financial-year sales and earnings per share implies year-over-year growth of 39.7% and 4%, respectively. For the next fiscal year, the consensus estimate indicates a 26.6% rise in sales and 47% growth in earnings.
Image Source: Zacks Investment Research
MELI currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Mercado Libre (NASDAQ: MELI), the leading e-commerce and fintech platform in Latin America, today released the latest episode of its Investor Relations podcast
MONTEVIDEO, Uruguay--(BUSINESS WIRE)--Mercado Libre (NASDAQ: MELI), the leading e-commerce and fintech platform in Latin America, today released the latest episode of its Investor Relations podcast series, "Inside Mercado Libre", "Mercado Pago Brazil with Andre Chaves." In this episode, Richard Cathcart, Investor Relations Senior Director, is joined by Andre Chaves, Senior VP and Country Head for Mercado Pago Brazil, to discuss the strategy, competitive advantages, and growth opportunities of Me.
When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important?
Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about MercadoLibre (MELI - Free Report) .
MercadoLibre currently has an average brokerage recommendation (ABR) of 1.66, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 19 brokerage firms. An ABR of 1.66 approximates between Strong Buy and Buy.
Of the 19 recommendations that derive the current ABR, 13 are Strong Buy and one is Buy. Strong Buy and Buy respectively account for 68.4% and 5.3% of all recommendations.
Brokerage Recommendation Trends for MELI
Check price target & stock forecast for MercadoLibre here>>>
The ABR suggests buying MercadoLibre, but making an investment decision solely on the basis of this information might not be a good idea. According to several studies, brokerage recommendations have little to no success guiding investors to choose stocks with the most potential for price appreciation.
Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation.
In other words, their interests aren't always aligned with retail investors, rarely indicating where the price of a stock could actually be heading. Therefore, the best use of this information could be validating your own research or an indicator that has proven to be highly successful in predicting a stock's price movement.
Zacks Rank, our proprietary stock rating tool with an impressive externally audited track record, categorizes stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), and is an effective indicator of a stock's price performance in the near future. Therefore, using the ABR to validate the Zacks Rank could be an efficient way of making a profitable investment decision.
Zacks Rank Should Not Be Confused With ABRAlthough both Zacks Rank and ABR are displayed in a range of 1--5, they are different measures altogether.
The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
Analysts employed by brokerage firms have been and continue to be overly optimistic with their recommendations. Since the ratings issued by these analysts are more favorable than their research would support because of the vested interest of their employers, they mislead investors far more often than they guide.
On the other hand, earnings estimate revisions are at the core of the Zacks Rank. And empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
Furthermore, the different grades of the Zacks Rank are applied proportionately across all stocks for which brokerage analysts provide earnings estimates for the current year. In other words, at all times, this tool maintains a balance among the five ranks it assigns.
There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices.
Is MELI Worth Investing In?Looking at the earnings estimate revisions for MercadoLibre, the Zacks Consensus Estimate for the current year has remained unchanged over the past month at $40.97.
Analysts' steady views regarding the company's earnings prospects, as indicated by an unchanged consensus estimate, could be a legitimate reason for the stock to perform in line with the broader market in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for MercadoLibre. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
It may therefore be prudent to be a little cautious with the Buy-equivalent ABR for MercadoLibre.
Key Takeaways MercadoLibre's cross-border GMV rose 68% year over year on an FX-neutral basis in Q1 2026.Free shipping, multi-seller carts, seller incentives and a China fulfillment center reduced friction.Argentina and Andean markets are adding growth as broader assortment supports the model's scale. MercadoLibre, Inc. (MELI - Free Report) is aggressively scaling its cross-border trade as a potential long-term growth driver. The company recorded impressive 68% year-over-year, foreign-exchange-neutral gross merchandise volume growth for the segment in the first quarter of 2026. This momentum indicates that international commerce is becoming a crucial operational layer alongside the core local marketplace.
The company believes it holds a unique position by connecting merchants in China and the United States with buyers across Latin America. Chinese suppliers, in particular, offer competitive prices, rapid product innovation and broad merchandise selection, helping MercadoLibre address growing consumer demand for affordability and assortment.
The business underwent meaningful changes during 2025. MercadoLibre simplified access to free shipping, introduced multi-seller shopping carts, expanded seller incentives and increased its presence in China, including opening its first fulfillment center there. These initiatives were designed to remove friction from the international drop-shipping model while improving execution and merchant relationships.
Growth is no longer concentrated in Mexico alone. Argentina and the Andean countries are contributing more meaningfully to cross-border trade growth, while markets such as Colombia and Peru benefit from broader product assortment where local seller networks are less developed.
MercadoLibre believes this model can become profitable as scale improves. By expanding product availability, improving delivery capabilities and strengthening merchant participation, cross-border trade is evolving into an increasingly important component of the company's marketplace strategy rather than simply an incremental international offering.
What the Latest Metrics Say About MercadoLibreMercadoLibre, which competes with Amazon.com, Inc. (AMZN - Free Report) and Sea Limited (SE - Free Report) , has seen its shares tumble 11.1% over the past six months compared with the industry’s 3.4% decline. While shares of Amazon have jumped 3.8%, those of Sea Limited have fallen 10.8% in the aforementioned period.
Image Source: Zacks Investment Research
From a valuation standpoint, MercadoLibre's forward 12-month price-to-earnings (P/E) ratio stands at 36.43, higher than the industry’s ratio of 21.94. The stock is also trading above its 12-month median level of 34.46.
MercadoLibre is trading at a premium to Amazon (with a forward 12-month P/E ratio of 25.97) and Sea Limited (22.29).
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for MercadoLibre’s current financial-year sales and earnings per share implies year-over-year growth of 39.7% and 4%, respectively. For the next fiscal year, the consensus estimate indicates a 26.6% rise in sales and 47% growth in earnings.
Image Source: Zacks Investment Research
MELI currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
After MercadoLibre (MELI +0.85%) delivered another year of more than 30% revenue growth in 2025, you might have expected the stock to surge. Instead, the stock went the other way.
Why? Because the narrative surrounding MercadoLibre has changed. A few years ago, investors were asking how big the company could become. Today, they're asking whether it can sustain its growth while protecting profitability.
That shift in sentiment has weighed on MercadoLibre stock. But it also raises an important question: Has the market become too pessimistic about one of Latin America's highest-quality technology companies?
Image source: Getty Images.
Why have investors become more cautious? MercadoLibre's business isn't slowing down. In fact, in the first quarter, revenue grew 49% year over year. What has changed is that its economics have simply become more complicated.
Over the past year, the company has invested aggressively to solidify its leadership in the e-commerce and fintech spaces in its core markets. It has expanded its logistics network, lowered free-shipping thresholds in Brazil, and continued pouring capital into Mercado Pago.
Those investments have strengthened the platform, but they've also increased costs.
At the same time, competition has intensified. Sea Limited's Shopee is competing aggressively in Brazil through shipping subsidies and attractive seller incentives. PDD Holdings' Temu is reshaping consumer expectations around pricing with ultra-cheap goods shipped from China.
As a result, MercadoLibre's operating margins have come under pressure, almost halving from 12.9% to 6.9%.
In other words, the market isn't questioning whether MercadoLibre can continue growing. It's questioning whether that growth will create long-term shareholder value.
Today's Change
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The business is getting stronger Ironically, if you ignored the share price and looked only at the operating business, you might conclude MercadoLibre is stronger today than it was three years ago.
Revenue is growing at an impressive pace. Gross merchandise volume keeps climbing. Mercado Pago is expanding across payments, lending, investments, and digital banking. Meanwhile, Mercado Ads has become another meaningful growth engine, allowing the company to monetize its marketplace more effectively.
More importantly, these businesses reinforce one another. The marketplace attracts buyers and merchants. Mercado Pago makes transactions easier while deepening customer relationships. Mercado Envios improves delivery speed and reliability. Mercado Ads gives merchants another reason to invest in the platform.
Each business becomes more valuable because the others exist. That integrated model makes MercadoLibre increasingly difficult to replicate, even as competition intensifies.
Has the valuation become more attractive? The market's increasingly cautious stance toward the company has had another effect: The stock's valuation has become far more reasonable.
During the COVID-19 pandemic, investors valued MercadoLibre like a high-growth marketplace with enormous potential. Today, the company has evolved into a much larger and more diversified business, yet it trades at a price-to-sales (PS) multiple of 2.9, well below the double-digit PS multiples seen during the 2020 and 2021 boom.
That lower valuation reflects legitimate concerns. Investors want proof that today's heavy investments will eventually translate into stronger margins, higher earnings, and expanding free cash flow.
But that's also where the opportunity may lie. If management succeeds in turning today's logistics investments, fintech expansion, and merchant services into stronger long-term economics, today's valuation could prove surprisingly attractive in hindsight.
What does it mean for investors? Calling any stock a once-in-a-decade buying opportunity sets an exceptionally high bar.
MercadoLibre hasn't earned that label with certainty. E-commerce competition remains intense. Margin pressure could persist longer than investors expect. And Latin America's macroeconomic environment has never been easy to navigate.
Yet the ingredients of an exceptional long-term investment remain firmly in place. MercadoLibre benefits from a dominant market position, several secular growth drivers, expanding network effects, and a management team that's willing to invest for the long term rather than maximize short-term earnings.
The best investments rarely look obvious when expectations are low. They emerge when a great business continues improving while the market focuses on near-term uncertainty.
Investors have sold off MercadoLibre's (MELI +0.85%) shares over the past year. Between rising competition in its e-commerce market in Latin America and worse-than-expected profits and margins, many are increasingly skeptical of the company's prospects. The stock has declined by 22% over the trailing-12-month period as a result. However, it may be too early to give up on MercadoLibre as there are good reasons to expect the business to bounce back eventually. Let's consider three of them.
1. Investing for the future In the first quarter, MercadoLibre's revenue increased by 49% year over year to $8.8 billion. However, the company's operating income dropped 20% year over year to $611 million, with its operating margin sliding by six percentage points to 6.9%. On the bottom line, MercadoLibre's earnings per share declined to $8.23, down from $9.74 in the prior-year quarter -- it came in below analyst estimates, sending the stock sharply lower.
Image source: The Motley Fool.
But it's worth putting things in context. MercadoLibre is deliberately investing heavily in the business. That's what's causing lower profits and margins. The question is whether the company's efforts are likely to pay off in the long run. My view is that they are. Consider MercadoLibre's decision to lower the free shipping threshold. E-commerce leaders have had tremendous success with this strategy, as it can attract more users to the platform and boost gross merchandise volume (GMV). MercadoLibre is already seeing results: The company's GMV in Brazil, its largest market, accelerated during the first period, partly thanks to this move.
Elsewhere, MercadoLibre is expanding its credit card business. This will inevitably hurt the bottom line in the near-term, since the company is required to recognize expected credit losses upfront as an income statement item. But MercadoLibre operates in significantly underbanked regions, and by doubling down on its credit card businesses, it could eventually establish itself as a leading online bank. That could pay off rich dividends down the road, despite the negative impact these investments are having on its financial results right now.
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2. MercadoLibre's competitive edge MercadoLibre is a leader across several categories in Latin America, including e-commerce and fintech. The company has faced increased competition lately, particularly from Shopee, an online commerce platform owned by Sea Limited (SE 0.43%). There should be room for multiple winners over the long run, especially since Latin America has been one of the fastest-growing e-commerce markets in recent years, and the industry should maintain a strong momentum at least over the medium term. But there is at least one other reason why MercadoLibre's future still looks bright: The company benefits from a wide moat.
For instance, MercadoLibre boasts deep network effects. The more merchants are on its platform, the more attractive it is to shoppers and vice versa. MercadoLibre also benefits from high switching costs. Online merchants rely on the company for a range of services, from setting up e-commerce storefronts, marketing, payment processing, inventory management, and much more. It's not easy to jump ship after setting up all these services within a platform. Further, MercadoLibre has established a large logistics network across Latin America, including several countries that are somewhat politically unstable. That's not easy to replicate, as it requires significant upfront investment. These advantages make it likely that MercadoLibre will remain a leader in its core markets for the foreseeable future.
3. Attractive growth opportunities MercadoLibre is best-known for its core e-commerce and fintech businesses. However, the company has been slowly ramping up other growth opportunities that could significantly improve its financial results over the long run. One of these is advertising. It is one of MercadoLibre's fastest-growing segments. In the first quarter, the company reported that advertising revenue soared by 63% year over year. MercadoLibre benefits from a deep ecosystem and a mountain of data on consumer spending habits, which it can use to help companies craft highly targeted ads. Also, advertising is a high-margin business that will eventually help lift the company's profits and margins.
An attractive long-term bet Some will argue that MercadoLibre's shares remain fairly expensive. It is trading at 36x forward earnings, compared to an average of 25.3x for consumer discretionary stocks. But given the company's multiple growth avenues, wide moat, and efforts to improve its business that are already bearing fruit, the stock is worth a premium. MercadoLibre has already started bouncing back. Its shares are up 13% over the past month. It's not too late to invest, though, as the stock still looks well-positioned to deliver superior returns over the long term.
MercadoLibre (MELI +1.94%) is a hot tech stock you may not have heard of if you don't live in Latin America. It's the largest e-commerce company in the region, but it's still much smaller than retail giants Amazon, Walmart, and Costco Wholesale.
However, it's growing much faster than all of these stocks, and it could join them as a $50 billion revenue stock by next year. Here's how.
Latin America's answer to Amazon MercadoLibre's main business is e-commerce, which accounts for slightly more than half of total revenue. In that way, it's a different model from the other retailers, which are more of a pure-play retail model. Even Amazon, which has a cloud business, Amazon Web Services (AWS), an advertising business, and several other segments, relies on e-commerce for more than 60% of its total revenue. When you include the ad business as part of e-commerce, as MercadoLibre does, it's more than 70%
Image source: Getty Images.
The fintech business, though, isn't completely separate; it was created to support payments on the MercadoLibre marketplace, and it's a component of the ecosystem. People who engage with the fintech platform are also more highly engaged with the e-commerce platform, and they're both growing rapidly.
In the 2026 first quarter, total revenue increased 49% year over year, with a 42% increase in gross merchandise volume (GMV) and a 41% increase in total payment volume.
The underpenetrated opportunity If MercadoLibre can continue to report similar growth over the next few quarters, it should easily reach $50 billion in trailing-12-month revenue by next year. Right now, it has $31.8 billion, and if it grows at a compound annual growth rate (CAGR) of 45%, it should surpass $50 billion before the end of 2027.
There are many reasons to believe that it can hit this goal and keep growing. Latin America is underpenetrated in both e-commerce and financial technology, but it's shifting as MercadoLibre improves its value proposition. One of the most consequential decisions it has made was to lower the free shipping threshold in Brazil last year, and that continues to deliver results. Unique active buyers are accelerating in the country, with a 32% increase year over year in the first quarter, as are GMV and items sold, which were up 38% and 56% respectively.
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Joining the ranks of similar large e-commerce and retail giants might take time; Amazon and Walmart are the two largest companies in the world by sales, and Costco, the smallest of the three, has $294 billion in trailing-12-month sales. For MercadoLibre to reach that, it would need to grow at a CAGR of 25% for the next 10 years. That's a real possibility, although Costco would also be much bigger at that point.
MercardoLibre stock trades at a P/E ratio of 49, near a 10-year low it reached earlier this year, and this could be a great opportunity to buy on the dip.
Despite the AI bottleneck trade selling off in July, the S&P 500 refused to break. During this time, I added into 5 of my existing positions in the portfolio. I added to Meta (META), making it an 8% portfolio position, leveraging new AI cloud initiatives, model released and strong price action, with 24% upside to Wall Street targets. I also increased my stake in Mercado Libre (MELI) 6.5% allocation, capitalizing on accelerating revenue and attractive risk-reward, despite recent margin pressures and EPS misses.
NEW YORK, July 10, 2026 (GLOBE NEWSWIRE) -- The law firm of Kirby McInerney LLP continues its investigation on behalf of MercadoLibre, Inc, (“MercadoLibre” or the “Company”) (NASDAQ:MELI) investors concerning the Company’s and/or members of its senior management’s possible violation of the federal securities laws and other unlawful business practices.
[LEARN MORE ABOUT THE INVESTIGATION]
What Happened?
On May 7, 2026, MercadoLibre released its first quarter 2026 financial results and disclosed that loans which were “typically on average of 5 months” had now “moved to 8 months” and that the Company is “taking provisions in Brazil... related on the one hand, to extending the average term of our loans.” On this news, the price of MercadoLibre shares declined by $246.49 per share, or approximately 13.12%, from $1,879.01 per share on May 7, 2026 to close at $1,632.52 on May 8, 2026.
What Should I Do?
At this stage, no lawsuit has been filed. The investigation is ongoing to determine whether claims may be brought under federal securities laws.
If you purchased or otherwise acquired Mercado securities, have information, or would like to learn more about this investigation, please contact Lauren Molinaro of Kirby McInerney LLP by email at [email protected], or fill out the contact form below, to discuss your rights or interests with respect to these matters at no cost.
[LEARN MORE ABOUT SECURITIES CLASS ACTIONS]
Kirby McInerney LLP is a New York-based plaintiffs’ law firm concentrating in securities, antitrust, whistleblower, and consumer litigation. The firm’s efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling billions of dollars. Additional information about the firm can be found at Kirby McInerney LLP’s website.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.
MercadoLibre (MELI - Free Report) closed at $1,852.22 in the latest trading session, marking a +2.46% move from the prior day. This change outpaced the S&P 500's 0.42% gain on the day. Elsewhere, the Dow gained 0.29%, while the tech-heavy Nasdaq added 0.29%.
The operator of an online marketplace and payments system in Latin America's stock has climbed by 12.29% in the past month, exceeding the Retail-Wholesale sector's gain of 0.24% and the S&P 500's gain of 2.2%.
Market participants will be closely following the financial results of MercadoLibre in its upcoming release. It is anticipated that the company will report an EPS of $8.69, marking a 15.71% fall compared to the same quarter of the previous year. Simultaneously, our latest consensus estimate expects the revenue to be $9.77 billion, showing a 43.9% escalation compared to the year-ago quarter.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $40.97 per share and a revenue of $40.36 billion, representing changes of +3.98% and +39.68%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for MercadoLibre. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. As of now, MercadoLibre holds a Zacks Rank of #5 (Strong Sell).
In the context of valuation, MercadoLibre is at present trading with a Forward P/E ratio of 44.13. This indicates a premium in contrast to its industry's Forward P/E of 16.81.
It is also worth noting that MELI currently has a PEG ratio of 1.11. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Internet - Commerce industry had an average PEG ratio of 1.05 as trading concluded yesterday.
The Internet - Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 181, putting it in the bottom 27% of all 250+ industries.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
MercadoLibre (MELI 0.12%), Latin America's largest e-commerce and fintech company, closed at a record high of $2,613.63 per share on June 30, 2025. Yet it's never split its stock.
Today, MercadoLibre trades at about $1,800. Concerns about higher spending and macro headwinds weighed down its stock, but its business is still growing like a weed. From 2025 to 2028, analysts still expect its revenue and EPS to grow at CAGRs of 29% and 27%, respectively.
Image source: Getty Images.
The expansion of its fintech platform into a full digital banking ecosystem for Latin America's underbanked population, the integration of those services into its market-leading e-commerce platform, and the growth of its higher-margin advertising business should fuel that growth. Economies of scale should further dilute its logistics expenses and widen its moat.
But will the company ever split its high-flying stock to broaden its appeal among smaller retail investors? Let's review what stock splits actually are, and if they actually matter to MercadoLibre's future.
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Why stock splits don't really matter We don't determine whether a stock is cheap or expensive based on its trading price. Instead, we should look at its price-to-sales and price-to-earnings ratios. At two times this year's sales, MercadoLibre looks cheap relative to its top-line growth. At 45 times this year's earnings, it looks a bit pricier -- but not too expensive -- relative to its bottom-line growth.
If MercadoLibre splits its stock, it's merely cutting a single pizza into smaller slices. Its price-to-sales and price-to-earnings ratios don't change. Most brokerages now offer fractional trading, so investors can simply buy a fraction of one share of MercadoLibre rather than wait for it to split into lower-priced shares.
Stock splits only really matter for options traders, who peg a single contract to a round lot of 100 shares, or the company's employees, who can receive more flexible stock-based compensation packages. So while a stock split might generate some short-term buzz, it doesn't mean much to long-term investors.
What should we expect from MercadoLibre? MercadoLibre probably won't split its stock this year, but I believe its scale, robust growth rates, and reasonable valuations still make it a great long-term investment.
With 84.1 million active commerce buyers and 82.9 million active fintech users in its latest quarter, it remains one of the easiest ways to profit from the secular growth of Latin America's e-commerce and fintech markets -- even if its near-term margin pressure makes it less appealing in this choppy market.
Bragar Eagel & Squire, P.C. Litigation Partner Brandon Walker Encourages Investors Who Suffered Losses In MercadoLibre (MELI) To Contact Him Directly To Discuss Their Options
If you purchased or acquired stock in MercadoLibre and would like to discuss your legal rights, contact Bragar Eagel & Squire partners Brandon Walker or Melissa Fortunato by email at [email protected] or by telephone at (212) 355-4648.
Click here to participate in the action.
NEW YORK, July 09, 2026 (GLOBE NEWSWIRE) --
What’s Happening:
Bragar Eagel & Squire, P.C., a nationally recognized stockholder rights law firm, is investigating potential claims against MercadoLibre, Inc. (“MercadoLibre” or the “Company”) (Nasdaq:MELI) on behalf of MercadoLibre stockholders. Our investigation concerns whether MercadoLibre has violated the federal securities laws and/or engaged in other unlawful business practices. Investigation Details:
On May 7, 2026, MercadoLibre released its first quarter 2026 financial results and disclosed that loans which were "typically on average of 5 months" had now "moved to 8 months" and that the Company is "taking provisions in Brazil... related on the one hand, to extending the average term of our loans."On this news, the price of MercadoLibre shares declined by $246.49 per share, or approximately 13.12%, from $1,879.01 per share on May 7, 2026 to close at $1,632.52 on May 8, 2026. Next Steps:
If you purchased or otherwise acquired MercadoLibre shares and suffered a loss, are a long-term stockholder, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Brandon Walker or Melissa Fortunato by email at [email protected], by telephone at (212) 355-4648, or by filling out this contact form. There is no cost or obligation to you. About Bragar Eagel & Squire, P.C.:
Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, South Carolina, and California. The firm represents individual and institutional investors in securities, derivative, and commercial litigation as well as individuals in consumer protection and data privacy litigation. The firm has a nationwide practice and routinely handles cases in both federal and state courts. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.
Follow us for updates on LinkedIn and Facebook, and keep up with other news by following Brandon Walker, Esq. on LinkedIn.
NEW YORK--(BUSINESS WIRE)--The law firm of Kirby McInerney LLP continues its investigation on behalf of MercadoLibre, Inc, (“MercadoLibre” or the “Company”) (NASDAQ:MELI) investors concerning the Company’s and/or members of its senior management’s possible violation of the federal securities laws and other unlawful business practices.
[LEARN MORE ABOUT THE INVESTIGATION]
What Happened?
On May 7, 2026, MercadoLibre released its first quarter 2026 financial results and disclosed that loans which were “typically on average of 5 months” had now “moved to 8 months” and that the Company is “taking provisions in Brazil... related on the one hand, to extending the average term of our loans.” On this news, the price of MercadoLibre shares declined by $246.49 per share, or approximately 13.12%, from $1,879.01 per share on May 7, 2026 to close at $1,632.52 on May 8, 2026.
What Should I Do?
At this stage, no lawsuit has been filed. The investigation is ongoing to determine whether claims may be brought under federal securities laws.
If you purchased or otherwise acquired Mercado securities, have information, or would like to learn more about this investigation, please contact Lauren Molinaro of Kirby McInerney LLP by email at [email protected], or fill out the contact form below, to discuss your rights or interests with respect to these matters at no cost.
[LEARN MORE ABOUT SECURITIES CLASS ACTIONS]
Kirby McInerney LLP is a New York-based plaintiffs’ law firm concentrating in securities, antitrust, whistleblower, and consumer litigation. The firm’s efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling billions of dollars. Additional information about the firm can be found at Kirby McInerney LLP’s website.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.
I keep buying MercadoLibre (NASDAQ:MELI | MELI Price Prediction) every time the market throws a tantrum about it, and the last two months have handed me plenty of chances. The stock is down 5.7% since the Q1 print on May 7, 2026, down 28.67% over the past year, and short-term holders keep hitting the sell button because provisions for doubtful accounts jumped to $1.244 billion from $603 million a year earlier. That reaction is exactly why I keep adding.
Here is the story the market is missing. Revenue in Q1 2026 grew 49.03% year over year to $8.85 billion, beating consensus by $522 million. CFO Martín de los Santos called it “our strongest growth rate since Q2 2022”. Brazil accelerated to 55% revenue growth with items sold up 56%, Mexico ran at 62%, and unique buyer growth in Brazil hit its fastest pace in five years. This is a company adding customers faster while its unit shipping costs in Brazil fall 17% year over year in local currency.
The fintech side is the second engine, and it is why I treat this as an ecosystem bet rather than a retail stock. Fintech revenue grew 51%, the credit card portfolio grew 104% year over year to $6.6 billion, Mercado Pago now has 83 million monthly active users, and assets under management climbed 77% to nearly $20 billion. Operating cash flow more than doubled to $2.075 billion in the quarter alone. S&P upgraded MELI to investment grade (BBB-) in July 2025, giving a fintech book that size a cheaper cost of capital just as it scales.
The runway is why I refuse to trade around this. The average Latin American makes 7 online purchases per year versus 41 in the US, 85% of Mexican small purchases still use cash, and credit to individuals as a share of GDP in Argentina sits at one-fifth of Brazil’s level. This is a decade-plus penetration story wearing a quarterly earnings costume.
Now the risk I take seriously. Operating margin compressed 600 basis points to 6.9%, adjusted free cash flow flipped to negative $56 million, and net debt climbed to $5.748 billion. Management extended average loan durations from 5 months to 8 months, which drove those provisions higher and prompted a securities fraud investigation by Kirby McInerney LLP. If credit losses in Brazil run hotter than modeled, this thesis takes real damage. What keeps me holding is that de los Santos was explicit: “margins are a consequence of our investment posture, and we can dial the investment intensity up or down”. The margin is a choice, and the growth is the result.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and MercadoLibre didn't make the cut. Grab the names FREE today.
The market seems to be catching on late. Analyst consensus target sits at $2,208.62 against a current price of $1,763.36, with 20 buy ratings, 4 holds, and zero sells. SVP Marcelo Melamud bought 124.64 shares at $1,604.62 on June 11, 2026, and Director Alejandro Aguzin purchased 600 shares in May 2026. Insiders are buying the same drawdown I am.
Forward P/E of 34 for a company compounding revenue near 50% inside a continent where e-commerce penetration is roughly half of US/UK/China is a price I will keep paying.
Every panic sale is somebody handing me shares of the operator building the payments, credit, and logistics rails of an entire continent, and I plan to keep taking them.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and MercadoLibre didn't make the cut. Grab the names FREE today.
When investors think about MercadoLibre (MELI +1.11%), they typically think of one of the world's best growth stories. The company has spent years building Latin America's leading e-commerce marketplace, while simultaneously growing Mercado Pago into one of the region's largest digital financial platforms.
Yet, despite another year of impressive operating results, the stock hasn't rewarded investors as it once did. So what's happening?
The answer isn't slowing growth. It's that investors have become increasingly concerned about MercadoLibre's cost of maintaining that growth.
Image source: Getty Images.
Growth isn't the problem By almost every operating measure, MercadoLibre is executing exceptionally well. Revenue has grown by more than 30% year over year to $29 billion, supported by healthy increases in gross merchandise volume, unique buyers, and payment volume.
Payments platform Mercado Pago is attracting new users while expanding deeper into lending, investments, and digital banking. Meanwhile, the company is investing billions of dollars to strengthen its logistics network and payments infrastructure across Brazil, Mexico, and Argentina.
These aren't the numbers of a business that's losing momentum. Instead, they reinforce the same long-term investment thesis that has driven MercadoLibre's success for years: Latin America's digital economy remains underpenetrated, and the company continues to strengthen its leadership position.
If growth were the only thing investors cared about, MercadoLibre's stock would probably be performing much better.
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Investors are becoming less tolerant of lower margins Instead, the market's attention has shifted to profitability.
During 2025, MercadoLibre increased spending on logistics, lowered free-shipping thresholds in Brazil, and leaned more heavily on promotions to defend its competitive position. Those investments helped drive higher engagement and transaction volumes, but they also weighed on operating margins. For perspective, net margin has fallen from 10.5% in the fourth quarter of 2024 to 6.4% in the fourth quarter of 2025.
That has created a different debate among investors. The question is no longer whether MercadoLibre can continue growing. It's whether that growth is becoming more expensive.
This distinction matters because companies can grow revenue for years while delivering disappointing shareholder returns -- if profitability fails to keep pace. In short, investors have become increasingly focused on whether MercadoLibre can eventually convert its scale into stronger earnings and free cash flow.
Competition has intensified in recent years Part of that concern stems from a more competitive landscape.
Shopee, a subsidiary of Sea Limited, has continued expanding aggressively in Brazil through shipping subsidies, attractive seller incentives, and low prices. Another newcomer, Temu, a subsidiary of PDD Holdings, has reset consumer expectations by offering ultra-cheap products shipped directly from China. On the fintech side, Nu Holdings is competing for consumers' wallets and financial relationships.
None of these companies individually poses a threat to MercadoLibre's leadership. Collectively, however, they force MercadoLibre to invest more aggressively to defend its ecosystem. For perspective, the company aims to invest $11 billion in its Brazilian market in 2026, up 50% from 2025.
That has important implications for investors. Competition doesn't have to reduce MercadoLibre's market share to affect the business. Just defending its leadership may require permanently higher logistics spending, more promotions, or lower seller fees, which could impact the company's long-term profitability.
What does it mean for investors? MercadoLibre remains one of the strongest businesses in Latin America. Its marketplace, logistics network, and fintech ecosystem reinforce one another, creating competitive advantages that few companies in the region can match.
But the stock is no longer being judged solely on growth. Investors also want proof that MercadoLibre can translate its expanding ecosystem into improving profitability. Until that happens, the stock may continue to experience volatility, even as the underlying business scales. Long-term investors need to be aware of this.
Key Takeaways MercadoLibre is expanding AI across commerce and fintech to boost efficiency, UX and revenues.MercadoLibre's LLM search improved relevance, conversions and sponsored listing click-throughs.MercadoLibre uses AI in Seller Assistant, logistics, Mercado Pago and internal development. MercadoLibre, Inc. (MELI - Free Report) is expanding the use of artificial intelligence (AI) across its commerce and fintech ecosystem, with management highlighting AI as an increasingly important tool for improving efficiency, enhancing user experiences and generating incremental revenues. The company is embedding AI across multiple parts of its business to improve customer experiences and increase productivity.
One of the most notable developments in the first quarter of 2026 was the rollout of an AI-powered search experience built on large language models. The new system moves beyond traditional keyword-based searches by better understanding customer intent. Management said the rollout in Brazil and Mexico improved product relevance, resulting in higher conversion rates and stronger click-through rates for sponsored listings, which generated incremental revenues.
During the first-quarter earnings call, management added that the technology is already live in Brazil, Mexico and Argentina, where it is enhancing product discovery, strengthening user engagement and improving ad returns through more relevant search results.
Beyond search, artificial intelligence is increasingly supporting operational efficiency across the business. MercadoLibre reported that daily active users of its Seller Assistant grew more than 40% month over month in March. Within its logistics network, an AI-powered assistant provides representatives with real-time process information and insights into operational challenges, helping improve productivity across fulfillment.
In Brazil, Mercado Pago's AI assistant has become more proactive by alerting users to negative balances in accounts connected through Open Finance and identifying funds held elsewhere that could earn higher yields with Mercado Pago. It can also move balances between accounts within seconds, enabling users to act immediately on those opportunities.
Internally, AI adoption is also improving software development efficiency, with productivity metrics growing seven to 10 times faster than headcount growth, while code rollbacks have declined materially year over year. MercadoLibre has also deployed Claude Cowork to approximately 31,000 employees, supporting broader AI adoption across the organization.
What the Latest Metrics Say About MercadoLibreMercadoLibre, which competes with Amazon.com, Inc. (AMZN - Free Report) and Sea Limited (SE - Free Report) , has seen its shares jump 3.7% over the past three months compared with the industry’s 8.9% rise. While shares of Amazon have rallied 14.4%, those of Sea Limited have advanced 28.9% in the aforementioned period.
Image Source: Zacks Investment Research
From a valuation standpoint, MercadoLibre's forward 12-month price-to-earnings (P/E) ratio stands at 35.52, higher than the industry’s ratio of 21.40. The stock is also trading above its 12-month median level of 34.47.
MercadoLibre is trading at a premium to Amazon (with a forward 12-month P/E ratio of 25.72) and Sea Limited (21.29).
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for MercadoLibre’s current financial-year sales and earnings per share implies year-over-year growth of 39.7% and 4%, respectively. For the next fiscal year, the consensus estimate indicates a 26.6% rise in sales and 47% growth in earnings.
The consensus estimate for earnings per share for the current and next fiscal year has fallen by $6.87 and $6.95 to $40.97 and $60.22, respectively, over the past 60 days.
Image Source: Zacks Investment Research
MELI currently carries a Zacks Rank #5 (Strong Sell). The rank reflects near-term earnings pressure despite the company’s strong top-line momentum. Although revenues increased 49% year over year in the first quarter, operating margin fell to 6.9% from 12.9% a year ago, and Net Interest Margin After Losses declined to 17.8% from 22.7% as the credit portfolio expanded. With accelerated investments continuing to weigh on profitability, earnings leverage may remain limited in the near term. The Zacks Consensus Estimate for second-quarter earnings calls for a 15.7% year-over-year decline.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
SummaryMercadoLibre remains a Buy, supported by robust ecosystem growth, resilient financials, and a margin of safety in valuation despite recent margin compression.MELI delivered 49% net revenue growth and a 42% GMV increase while continuing to invest heavily in strategic initiatives, accepting near-term margin pressure for long-term advantage.Macro risks persist, notably the potential for higher-for-longer interest rates, competitive pressure, and potential election volatility, but the company's strong balance sheet and market leadership also position it for long-term re-rating.Conservative valuation assumptions result in levels that exceed current prices, highlighting a compelling entry point while the market focuses on short-term margin pressure.sankai/iStock via Getty Images
Introduction The first time I covered MercadoLibre (MELI), I initiated coverage with a Buy rating, highlighting the company's significant growth in South America as its ecosystem expands aggressively.
Following another strong quarter and plans for more
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Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in MELI over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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MercadoLibre remains a high-conviction buy, with a 7% portfolio allocation as the stock found technical support at the 50-month/200 DMA and moved higher since. MELI's top-line growth is accelerating due to strategic investments in shipping, credit cards, and 1P commerce, despite ongoing margin compression. Consensus expects 42% revenue growth and a 12% EPS decline in Q2 FY26; beating EPS estimates could trigger a significant rerating as MELI trades 33% below all-time highs.
NEW YORK, July 06, 2026 (GLOBE NEWSWIRE) -- The law firm of Kirby McInerney LLP reminds investors of its investigation on behalf of MercadoLibre, Inc. (“MercadoLibre” or the “Company”) (NASDAQ:MELI) investors concerning the Company’s and/or members of its senior management’s possible violation of the federal securities laws or other unlawful business practices.
[LEARN MORE ABOUT THE INVESTIGATION]
What Happened?
On May 7, 2026, MercadoLibre released its first quarter 2026 financial results and disclosed that loans which were “typically on average of 5 months” had now “moved to 8 months” and that the Company is “taking provisions in Brazil... related on the one hand, to extending the average term of our loans.” On this news, the price of MercadoLibre shares declined by $246.49 per share, or approximately 13.12%, from $1,879.01 per share on May 7, 2026 to close at $1,632.52 on May 8, 2026.
What Should I Do?
At this stage, no lawsuit has been filed. The investigation is ongoing to determine whether claims may be brought under federal securities laws.
If you purchased or otherwise acquired MercadoLibre securities, have information, or would like to learn more about this investigation, please contact Lauren Molinaro of Kirby McInerney LLP by email at [email protected], or fill out the contact form below, to discuss your rights or interests with respect to these matters at no cost.
[LEARN MORE ABOUT SECURITIES CLASS ACTIONS]
Kirby McInerney LLP is a New York-based plaintiffs’ law firm concentrating in securities, antitrust, whistleblower, and consumer litigation. The firm’s efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling billions of dollars. Additional information about the firm can be found at Kirby McInerney LLP’s website.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.
MercadoLibre (MELI +1.27%) Stock fell 16% in the first half of 2026, according to data provided by S&P Global Market Intelligence. It reported declining profits for two consecutive quarters.
The dominant tech company in Latin America MercadoLibre enjoys a leading position in e-commerce and fintech in 18 Latin American countries. It consistently demonstrates high growth as it generates a shift to online shopping, and since its markets lag behind other global regions, it still has a vast opportunity. For example, e-commerce penetration in the U.S. is 27%, while it's only 14% in Latin America.
Image source: Getty Images.
The company is reporting incredible growth across segments and metrics. Total revenue increased 49% year over year in the 2026 first quarter, driven by both e-commerce and fintech. In e-commerce, gross merchandise volume (GMV) was up 42% over last year, with a 26% increase in unique active buyers. Items sold were up 47%, and items sold per unique buyer were up 16%. That's particularly impressive considering the number of new customers.
There was major growth in Brazil, its largest market, since it lowered its free shipping threshold in the country from $R79 to $R19.
Fintech is a similar story. Total payment volume was up 50% year over year, with a 29% increase in monthly active users to 83 million. The credit portfolio was up 87%, and assets under management were up 77%.
Laying the groundwork for the future Despite the fantastic performance, MercadoLibre stock has plunged because profits are declining. In the first quarter, operating income fell 20% from last year, and operating margin dropped from 12.9% last year to 6.9% this year.
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Management says it's focusing on the future. It sees a massive long-term opportunity, and it has the potential to gain the most with its first-mover's edge. "When your business is behaving like this, we believe the right response is not to harvest -- it is to invest," it said.
In Mexico, for example, more than half of the population relies on informal credit sources, while 85% pays for purchases under $30 with cash. In Argentina, while 80% of the population has a bank account, its use of credit is far below that of Brazil. Management sees the region as ripe for continued disruption, and the company has high customer satisfaction, which it takes as a mandate to improve the industry.
At the current price, MercadoLibre stock trades at 47 times trailing 12-month earnings, an attractive entry point for new investors.
Strong financial results don't always translate into share price appreciation, and no one knows this better than MercadoLibre (MELI +1.27%) and Walmart (WMT +2.77%). Both stocks have frustrated investors this year. Market worries and short-term pressures, including tariffs and inflation, have overshadowed the strong fundamentals of both companies.
The question now is, amid this pullback, which stock is the better buy?
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Walmart's first-quarter fiscal 2027 (ended April 30, 2026) revenue grew a little more than 7% year over year. More impressively, Walmart's global advertising business grew 37%, while e-commerce jumped up 26%. Walmart reported negative free cash flow of $1.9 billion, largely due to ongoing investments in automation and technology.
Image source: The Motley Fool.
MercadoLibre's revenue skyrocketed 49% year over year in its fiscal 2026 Q1, but operating margins fell as the company invested heavily in logistics. Growth is so strong across all of MercadoLibre's markets that the company justified its higher operating costs by stating in the quarterly letter to shareholders, "When your business is behaving like this, we believe the right response is not to harvest -- it is to invest."
MercadoLibre's fintech arm, Mercado Pago, is where the greatest growth opportunity lies. The company's credit portfolio reached $14.6 billion, an 87% year-over-year increase as of the latest quarter. Assets under management also hit $20 billion, a 77% jump from the year prior.
There are challenges, as MercadoLibre operates in emerging markets with limited digital commerce and banking infrastructure. The company also has to deal with regulatory obstacles in each Latin American country.
Which stock you should buy depends on your objectives. If it's long-term growth you're looking for, MercadoLibre is the clear winner. The omnichannel giant is expanding rapidly across Latin America in both e-commerce and fintech.
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Walmart, while still trading at a premium, is the more reliable and steady bet. Both stocks have their place in various portfolios. Still, if I'm looking at this through a purely growth lens, MercadoLibre has an incredible opportunity in emerging markets.
Catie Hogan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends MercadoLibre and Walmart. The Motley Fool has a disclosure policy.
MercadoLibre remains undervalued despite a challenging technical setup and recent underperformance versus Latin American equities and the S&P 500. MELI delivered strong Q1 revenue growth and user engagement, but shares fell sharply due to significant margin compression from aggressive long-term growth investments. I maintain a buy rating on MELI, with a revised fair value estimate of $2,475 based on $55 normalized EPS and a 45x P/E, reflecting robust out-year profit growth.
SummaryMercado Libre's FQ2'26 earnings call may show sequentially weaker margins and higher net debt ratios, as the management intensifies their commerce/logistics/fintech growth initiatives.This is, albeit with the aggressive investments strengthening conversion metrics, improving logistics efficiency, and growing cross-selling across commerce/fintech, lending credence to its high-growth prospects.The recent meltdown has triggered the compelling EV/Sales at 2.35x and PEG ratio at 1.21x, significantly aided by the potential emergence of a technical bottom.MELI remains a great contrarian Buy, given the structurally robust, diversified growth prospects, despite the near-term margin compression/debt risks. Dilok Klaisataporn/iStock via Getty Images
I previously rated MercadoLibre, Inc. (MELI) as a Buy in April 2026, thanks to the great dip buying opportunity after the prior selloff.
In this article, I shall discuss why MELI remains a Great Buy
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The analysis is provided exclusively for informational purposes and should not be considered professional investment advice. Before investing, please conduct personal in-depth research and utmost due diligence, as there are many risks associated with the trade, including capital loss.
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Some stocks get most of the market's attention. Space Exploration Technologies, otherwise known as SpaceX, has been in the limelight since before its initial public offering (IPO) on June 12, and the "Magnificent Seven" stocks (Apple, Alphabet, Amazon, Microsoft, Nvidia, Meta Platforms, and Tesla) frequently dominate the news cycle.
However, you'll usually find the best investments out of the spotlight. Consider how much a stock can continue to reward investors if it's already worth several trillion dollars. These companies might have great features that make them worth buying, but they won't be the ones that turn a small investment into six or seven figures.
If you're looking for a fantastic, high-growth stock, consider MercadoLibre (MELI +1.27%). It's 35% off its high, and it could be a better buy than SpaceX or any Magnificent Seven stock. Here's why.
Image source: Getty Images.
A massive opportunity in digital disruption MercadoLibre means "free market" in Spanish, and its platform opens up e-commerce to the masses in Latin America. It operates in 18 Latin American countries and is the leading company of its kind in the region. It's growing rapidly; revenue increased 49% year over year in the first quarter, while gross merchandise volume rose 42% and unique items sold increased 47%.
It had 126 million unique active users as of the 2026 first quarter, providing the company with massive amounts of data that it turns into focused insights. MercadoLibre uses the data in multiple ways, such as an artificial intelligence assistant for customers, including virtual try-ons, resulting in higher-conviction purchases. It has what it calls the most reliable logistic network in the region, with 76% of shipments delivered within 48 hours.
While MercadoLibre is demonstrating solid performance, it's the opportunity that looks especially compelling. Latin America still lags behind many other global regions in e-commerce penetration, with 14%, in contrast with 27% in the U.S. and 33% in China. While a U.S. customer averages 50 e-commerce purchases annually, a Latin American customer averages seven.
The company has also grown its financial technology business into one of the top players, and it claims to be the largest digital bank in Latin America. MercadoLibre has 83 million monthly active users, which have grown at a compound annual growth rate (CAGR) of 31% from 2020 through this past quarter. The credit portfolio has increased at a CAGR of 94%, while assets under management have increased at a CAGR of 83%.
It's using AI here too, with a digital assistant for its MercadoPago digital wallet that provides actionable, data-driven suggestions to help customers engage and get their money right.
Why MercadoLibre stock is a bargain So you may ask, why is the stock down? Profits have been under pressure over the past two quarters. In the first quarter, operating income fell from $763 million to $611 million year over year, and the margin dropped from 12.9% to 6.9%.
Management says that it's building out now to position itself for future growth. The company has also negatively affected by new customers in the credit business as management widens its risk profile to entice new business.
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The company isn't worried about the long-term impact of these actions; on the contrary, it sees it as necessary and positive for its future. But the market isn't buying it right now.
At the current price, though, MercadoLibre stock trades at 45 times trailing 12-month earnings, near a 10-year low. Notice that it's not incredibly cheap even at this price; that implies market confidence. However, it's still a bargain given the company's opportunities.
Is it a better buy than SpaceX and all of the Magnificent Seven stocks? When viewed in the context of how much it could grow your money over time, I think it is. And since the company plans to report second-quarter earnings Aug. 5, July could be an auspicious time to buy MercadoLibre stock.
The market is soaring, but MercadoLibre (MELI +1.27%) is down 30% over the past year. Investors have soured on the Latin American financial technology and e-commerce player because of its aggressive investments, which are eroding profit margins.
It has been left for dead, with shares up only 10% over the last five years, while the broad market S&P 500 index is up close to 100% over the same timeframe. However, it's at this moment that MercadoLibre looks like a fantastic investment for anyone with a time horizon longer than next quarter. Here's why you should consider buying even more of MercadoLibre as the stock inches lower.
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Playing the long game MercadoLibre operates in two sectors with some strong overlap: financial technology and e-commerce. In e-commerce, it is building an "everything store" similar to Amazon in Latin American countries, investing in fast delivery, a wide selection, and a bundled subscription offering.
Its current crop of investments in free delivery for close to all orders in Brazil has temporarily reduced profit margins. At the same time, it has accelerated revenue growth in the country. In Q1 2026, total commerce revenue grew 47% year over year last quarter in constant currency, on top of 57% growth in the same quarter a year ago.
More buyers, more shopping volume, and more revenue are being spent on MercadoLibre's e-commerce marketplace. This will mean a short-term hit to margins, but it should also lead to a long-term competitive advantage for the business. The same can be said for its MercadoPago consumer finance segment. MercadoPago is accelerating its acquisition of credit card customers to deepen its relationship as a banking application and drive more spending on the MercadoLibre online marketplace.
When a credit card customer is acquired, it requires the bank -- in this case, MercadoLibre -- to allocate loan losses over the life of the customer relationship, which means an upfront hit to margins if many customers are acquired. With all these new credit card customers, MercadoLibre's fintech revenue grew 54% year over year last quarter.
Overall, MercadoLibre's revenue is growing 46% year over year in constant currency, making it one of the fastest-growing large-cap technology players today. However, investors are still not happy because of the short-term hit this accelerated growth has had on profit margins.
Image source: Getty Images.
Why MercadoLibre's stock is cheap today Last quarter, MercadoLibre's overall operating margin fell to 6.9%, and it may fall further in the quarters ahead due to the upfront investments discussed above. This has investors very nervous, but it should not be misconstrued as MercadoLibre losing its lead in e-commerce and consumer finance in Latin America.
Long-term, MercadoLibre should be able to regain or surpass its previous high profit margin of 16%, if not exceed it, due to increased scale, higher-margin fintech revenue, and faster-growing advertising revenue (which is growing faster than the overall business). Combined with a business with a long history of growing revenue at a fast, double-digit rate, it is plausible that the company's revenue of $31.8 billion could climb to $100 billion over the next five years or so. A 15% profit margin would equate to $15 billion in earnings for MercadoLibre five years from now.
Today, MercadoLibre's stock trades at a market cap of $88 billion. Assuming the stock trades at 20x earnings five years from now -- which is a reasonable level for a fast-growing stock, if not a discount -- then MercadoLibre will have a market cap of $300 billion within five years. Buying at today's market cap would deliver north of 20% annualized returns before dividends or buybacks, likely beating the market. This makes MercadoLibre an easy stock to buy on the dip right now.
MercadoLibre is primed for a rebound after a ~30% stock decline despite accelerating growth, especially in Brazil. I see MELI benefiting from secular Latin American growth, with ~$20B quarterly GMV expanding at a mid-30s pace. MercadoPago, MELI's fintech arm, drives TPV at ~4x GMV and now contributes nearly half of total revenue.
Growth-focused investors may struggle to find buys in today's market. The Shiller P/E ratio of 41 indicates the overall market is near record highs. Also, even if investors want to buy, they may gravitate to more popular technology stocks or give up on growth and turn to beaten-down dividend payers in the consumer space.
Fortunately, the market offers a choice for rapid growth without paying an outrageous valuation. If you are willing to take on risk, you have $1,000 that isn't needed for monthly bills or to pay down short-term debt, you could find an opportunity in July to invest it in MercadoLibre (MELI +1.27%), and here's why.
Image source: The Motley Fool.
The state of MercadoLibre First, investors might feel skittish about Latin America, a market with periodic economic and political turmoil.
Moreover, e-commerce competition has squeezed margins on the retail side of the business as MercadoLibre has attracted competition from Amazon, Sea Limited, and numerous smaller competitors. Furthermore, a significant increase in loan volumes has forced the company to absorb higher doubtful-account expenses, which rose 106% year over year in the first quarter of 2026.
And both of these factors reduced its profits in the first quarter of 2026, even as its growth is accelerating amid a 49% yearly revenue increase. These challenges likely led to the stock's 35% decline from its all-time high.
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Second, you might wonder why I would invest $1,000 in MercadoLibre when shares trade for around $1,700 at the time of this writing. Fortunately, most brokerages offer partial shares, and while that may incur additional fees or minor hassles, the company's value proposition probably makes that slight inconvenience worth it.
MercadoLibre has thrived by turning adversity into opportunity. When cash-based customers could not buy on MercadoLibre, Mercado Pago was created to offer financial products and, later, a fintech system to serve these customers. Also, when sellers lacked satisfactory logistics options, Mercado Envios was created to fulfill orders and ship products more quickly.
These businesses deepened MercadoLibre's competitive advantage, meaning that accepting lower margins now could mean higher sales and fewer competitors later, ultimately deepening its e-commerce leadership. Regarding fintech, MercadoLibre has responded by using AI more to evaluate potential borrowers. It has also limited loan amounts to reduce potential losses from bad loans.
Lastly, MercadoLibre sells at a price-to-earnings ratio (P/E) of 45. While that is well above the 31 average for the S&P 500, it is also low given that Amazon routinely traded above 50 times earnings in its earlier growth years. When also considering the aforementioned revenue growth, that arguably means its valuation is reasonable.
Investors should buy as much of a partial share of MercadoLibre as they can with their $1,000. The company appears risky given its Latin American focus, rising competition, and higher bad-loan expenses.
However, it has repeatedly succeeded at turning adversity into opportunity, and as it addresses its challenges, profit growth could eventually match or exceed the company's huge revenue growth. Thus, if MercadoLibre's history is any indication, overcoming its current challenges should eventually take the consumer discretionary stock to record highs and beyond.
Key Takeaways Brazil's FX-neutral GMV growth rose to 38%, while items sold surged 56% in the first quarter.Lower free shipping threshold helped attract new customers and lift purchase frequency in Brazil.Brazil unit shipping costs fell 17% in local currency as same and next-day shipments rose 39%. MercadoLibre, Inc.’s (MELI - Free Report) first-quarter 2026 performance suggests Brazil is becoming one of the important growth engines. While the company continued to deliver healthy momentum across Latin America, Brazil stood out for accelerating growth in both commerce and customer engagement, supported by sustained investments in logistics, pricing and the user experience. The market has evolved beyond being MercadoLibre’s largest contributor by scale and is now driving some of its strongest operating trends.
The clearest evidence came from the marketplace business. Brazil’s FX-neutral gross merchandise volume (GMV) growth accelerated to 38% in the first quarter from 35% in the preceding quarter, while items sold surged 56%, up from 45% in the fourth quarter and 42% in the third quarter of 2025. The company attributed the improvement largely to its lower free-shipping threshold, which continued to attract new customers and encourage higher purchase frequency. Brazil also fueled a record year-over-year increase of 17 million unique active buyers, helping MercadoLibre’s total unique active buyers grow 26%.
The stronger demand is also improving operating efficiency. Same and next-day shipments increased 39% year over year, driven particularly by accelerating volumes in Brazil. At the same time, unit shipping costs in Brazil declined 17% in local currency from the prior year, improving from an 11% reduction in the preceding quarter despite significantly higher shipment volumes. This demonstrates that rising scale is helping offset the costs of MercadoLibre’s free-shipping initiatives.
Brazil is also reinforcing MercadoLibre’s broader ecosystem strategy. The company highlighted continued strength in Mercado Pago, while its credit card business in Brazil has reached a stage where older customer cohorts are maturing as expected, supporting further expansion. Together, these trends suggest Brazil is no longer just MercadoLibre’s biggest market by scale, but one of the clearest drivers behind its accelerating marketplace growth.
What the Latest Metrics Say About MercadoLibreMercadoLibre, which competes with Amazon.com, Inc. (AMZN - Free Report) and Sea Limited (SE - Free Report) , has seen its shares jump 1.6% over the past three months compared with the industry’s 7.3% rise. While shares of Amazon have rallied 15.3%, those of Sea Limited have advanced 24.4% in the aforementioned period.
Image Source: Zacks Investment Research
From a valuation standpoint, MercadoLibre's forward 12-month price-to-earnings (P/E) ratio stands at 34.42, higher than the industry’s ratio of 21.07. The stock is trading marginally below its 12-month median level of 34.44.
MercadoLibre is trading at a premium to Amazon (with a forward 12-month P/E ratio of 25.61) and Sea Limited (20.54).
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The Zacks Consensus Estimate for MercadoLibre’s current financial-year sales and earnings per share implies year-over-year growth of 39.7% and 4%, respectively. For the next fiscal year, the consensus estimate indicates a 26.6% rise in sales and 47% growth in earnings.
The consensus estimate for earnings per share for the current and next fiscal year has fallen by $6.87 and $6.95 to $40.97 and $60.22, respectively, over the past 30 days.
Image Source: Zacks Investment Research
MELI currently carries a Zacks Rank #5 (Strong Sell). The rank reflects near-term earnings pressure despite the company’s strong top-line momentum. Although revenues increased 49% year over year in the first quarter, operating margin fell to 6.9% from 12.9% a year ago, and Net Interest Margin After Losses declined to 17.8% from 22.7% as the credit portfolio expanded. With accelerated investments continuing to weigh on profitability, earnings leverage may remain limited in the near term. The Zacks Consensus Estimate for second-quarter earnings calls for a 15.7% year-over-year decline.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
NEW YORK--(BUSINESS WIRE)--The law firm of Kirby McInerney LLP is investigating potential claims against MercadoLibre, Inc. (“MercadoLibre” or the “Company”) (NASDAQ:MELI). The investigation concerns whether the Company and/or members of its senior management may have violated federal securities laws or engaged in other unlawful business practices.
[LEARN MORE ABOUT THE INVESTIGATION]
What Happened?
On May 7, 2026, MercadoLibre released its first quarter 2026 financial results and disclosed that loans which were “typically on average of 5 months” had now “moved to 8 months” and that the Company is “taking provisions in Brazil... related on the one hand, to extending the average term of our loans.” On this news, the price of MercadoLibre shares declined by $246.49 per share, or approximately 13.12%, from $1,879.01 per share on May 7, 2026 to close at $1,632.52 on May 8, 2026.
What Should I Do?
At this stage, no lawsuit has been filed. The investigation is ongoing to determine whether claims may be brought under federal securities laws.
If you purchased or otherwise acquired MercadoLibre securities, have information, or would like to learn more about this investigation, please contact Lauren Molinaro of Kirby McInerney LLP by email at [email protected], or fill out the contact form below, to discuss your rights or interests with respect to these matters at no cost.
[LEARN MORE ABOUT SECURITIES CLASS ACTIONS]
Kirby McInerney LLP is a New York-based plaintiffs’ law firm concentrating in securities, antitrust, whistleblower, and consumer litigation. The firm’s efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling billions of dollars. Additional information about the firm can be found at Kirby McInerney LLP’s website.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.
MercadoLibre (MELI - Free Report) ended the recent trading session at $1,742.19, demonstrating a +2.64% change from the preceding day's closing price. The stock exceeded the S&P 500, which registered a loss of 0.22% for the day. At the same time, the Dow lost 0.03%, and the tech-heavy Nasdaq lost 0.66%.
Shares of the operator of an online marketplace and payments system in Latin America witnessed a gain of 1.47% over the previous month, beating the performance of the Retail-Wholesale sector with its loss of 5.51%, and the S&P 500's loss of 1.21%.
The upcoming earnings release of MercadoLibre will be of great interest to investors. The company's upcoming EPS is projected at $8.69, signifying a 15.71% drop compared to the same quarter of the previous year. In the meantime, our current consensus estimate forecasts the revenue to be $9.77 billion, indicating a 43.9% growth compared to the corresponding quarter of the prior year.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $40.97 per share and a revenue of $40.36 billion, indicating changes of +3.98% and +39.68%, respectively, from the former year.
Investors might also notice recent changes to analyst estimates for MercadoLibre. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. MercadoLibre is currently sporting a Zacks Rank of #5 (Strong Sell).
Looking at its valuation, MercadoLibre is holding a Forward P/E ratio of 41.43. This expresses a premium compared to the average Forward P/E of 17.07 of its industry.
Investors should also note that MELI has a PEG ratio of 1.05 right now. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Internet - Commerce industry had an average PEG ratio of 1.06 as trading concluded yesterday.
The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 182, which puts it in the bottom 27% of all 250+ industries.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
LOS ANGELES--(BUSINESS WIRE)--Glancy Prongay Wolke & Rotter LLP, a leading national shareholder rights law firm, today announced that it has commenced an investigation on behalf of MercadoLibre, Inc. (“MercadoLibre” or the “Company”) (NASDAQ: MELI) investors concerning the Company's possible violations of the federal securities laws.IF YOU ARE AN INVESTOR WHO LOST MONEY ON MERCADOLIBRE, INC. (MELI), CLICK HERE TO INQUIRE ABOUT POTENTIALLY PURSUING CLAIMS TO RECOVER YOUR LOSS.What Happened?On.
BENSALEM, Pa.--(BUSINESS WIRE)--Law Offices of Howard G. Smith announces an investigation on behalf of MercadoLibre, Inc. (“MercadoLibre” or the “Company”) (NASDAQ: MELI) investors concerning the Company’s possible violations of federal securities laws.
IF YOU ARE AN INVESTOR WHO SUFFERED A LOSS IN MERCADOLIBRE, INC. (MELI), CONTACT THE LAW OFFICES OF HOWARD G. SMITH ABOUT POTENTIALLY PURSUING CLAIMS TO RECOVER YOUR LOSS.
Contact the Law Offices of Howard G. Smith to discuss your legal rights by email at [email protected], by telephone at (215) 638-4847 or visit our website at www.howardsmithlaw.com.
What Happened?
On May 7, 2026, MercadoLibra released its first quarter 2026 financial results and disclosed that loans which were “typically on average of 5 months” had now “moved to 8 months” and that the Company is “taking provisions in Brazil... related on the one hand, to extending the average term of our loans.”
On this news, MercadoLibre’s stock price fell $237.49, or 12.7%, to close at $1,632.52 per share on May 8, 2026, thereby injuring investors.
Contact Us To Participate or Learn More:
If you purchased MercadoLibre securities, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact us:
Law Offices of Howard G. Smith,
3070 Bristol Pike, Suite 112,
Bensalem, Pennsylvania 19020,
Telephone: (215) 638-4847
Email: [email protected],
Visit our website at: www.howardsmithlaw.com.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.
In a year when tech stocks are rallying, MercadoLibre (MELI +1.46%) is a laggard. Latin America's leader in e-commerce, payments, logistics, and other fintech offerings is trading 16% lower in 2026. There are some good reasons for MercadoLibre's pullback in recent months. The headwinds are real. However, don't sleep on the tailwinds.
The Latin American bellwether is growing at an impressive pace, and some of the near-term challenges that are squeezing margins could prove temporary. Let's go over the bad, and the good, to see whether this is a dip worth buying or the start of more pain to come.
Image source: Getty Images.
First up, the headwinds There have been plenty of ups and downs for MercadoLibre's stock, and the latest downturn is the 17% drop it experienced over the six trading days following the company's disappointing first-quarter report. MercadoLibre turned in a strong quarter of top-line growth -- and we'll get to that shortly -- but it was a dud on the bottom line. MercadoLibre has fallen short of Wall Street's profit targets in three of its past four quarters.
Two things are weighing on MercadoLibre's profitability. The first is the cutthroat nature of Brazil's online retail market. Overseas competitors are willing to incur losses to establish a presence in a region that's still in its early stages of digital development. One popular lever to drive sales is to slash the minimum order size for free delivery, and MercadoLibre has had to do just that to remain the top dog on its home turf.
The other major factor weighing on MercadoLibre's bottom line is the popularity of its loan products. MercadoLibre's credit portfolio has jumped 87% over the past year. Beyond increasing MercadoLibre's overall risk profile, initiating loans entails an accounting hit for potential loss provisions.
The loss provisions and shrinking e-commerce margin in Brazil are leading analysts to whittle down their profit projections. In the past three months alone, Wall Street estimates have declined by 28% for this year and 25% for 2027.
Tailwinds, for the win You can't deny that MercadoLibre is a growth stock. Revenue soared 49% (or 46% on a foreign-exchange neutral basis) in the first quarter of this year. Its Mercado Pago payment platform processed $87.2 billion in transactions during the quarter, a 50% increase. Its flagship e-commerce business is serving 84.1 million active buyers, a 26% increase over the past year. The presence of hungry competition isn't eating into MercadoLibre's engagement, as gross merchandise volume spiked 42% for the quarter.
Despite the near-term drag on reported profitability, its net cash from operating activities doubled during the period. The pace of the initial loss provisions should slow over time, and with MercadoLibre's commitment to protecting its e-commerce stronghold with lower price minimums, it's just a matter of time before its rivals start to buckle.
MercadoLibre is currently trading at 42 times this year's earnings and less than 30 times next year's target earnings. These aren't cheap multiples, but the results are depressed given what should be temporary margin pressure. The risks are certainly there, but in MercadoLibre's 19 years of public trading, the company has typically rewarded taking a chance on its shares when there's a pullback. This dip feels like an opportunity for long-term investors.
As digital commerce continues to evolve in 2026, choosing between Etsy (ETSY 5.41%) and MercadoLibre (MELI +0.90%) requires balancing specialized niche dominance against a fast-growing regional ecosystem throughout Latin America.
Etsy connects millions of buyers with independent sellers of vintage and handmade items, while MercadoLibre operates as the leading commerce and fintech platform in Latin America. Investors compare them because both represent distinct paths within the retail sector, offering exposure to different geographic and category growth drivers.
The case for EtsyEtsy connects 86.5 million active buyers with millions of independent sellers of unique, creative, and vintage goods. The company differentiates itself among consumer discretionary stocks by focusing on machine-learning search tools and human-centric brand messaging. It is also currently divesting its Depop fashion resale marketplace to eBay to focus resources on its core strategic initiatives, like the Etsy Insider loyalty program.
In FY 2025, revenue reached nearly $2.9 billion, representing a modest growth rate of roughly 2.7% compared to the previous fiscal year. Net income for the period was approximately $163.0 million, resulting in a net margin of 5.7% for the company. This figure was lower than the $303.3 million in net income reported in 2024, reflecting higher costs and a more cautious consumer spending environment.
The debt-to-equity ratio was -2.8x in December 2025, meaning total liabilities exceeded shareholder equity. The current ratio of 1.4x indicates the company can cover its immediate liabilities, and free cash flow reached nearly $638.8 million. Note that stock-based compensation accounted for roughly 35.3% of operating cash flow, thereby inflating reported cash generation, since SBC is a non-cash expense added back in the cash flow statement.
The case for MercadoLibreMercadoLibre operates the largest online commerce and fintech ecosystem in Latin America, serving a diverse user base across eighteen different countries. The company integrates the Mercado Libre marketplace with Mercado Pago for digital payments and Mercado Ads for advertising solutions. It recently streamlined its merchant services by migrating storefront functionality into its core marketplace to improve the user experience for professional sellers.
During FY 2025, revenue reached approximately $28.9 billion, a 39.1% increase over the prior year. Net income for the fiscal year was approximately $2.0 billion, resulting in a net margin of 6.9%. This performance indicates the continued scaling of its high-margin advertising and fintech arms, even as the company invests heavily in its regional logistics infrastructure.
As of its December 2025 balance sheet, the debt-to-equity ratio was 1.7x, which measures total debt relative to shareholder equity. The current ratio of 1.2x suggests the business can meet its short-term financial obligations with existing liquid assets. Free cash flow was nearly $10.8 billion, demonstrating strong cash generation from operations after accounting for necessary capital expenditures in its delivery network.
Risk profile comparisonEtsy faces intense competition and pressure on consumer discretionary spending from a variety of retail platforms. Regulatory complexity regarding AI and e-commerce laws, such as the Digital Services Act, adds legal risk to its global operations. Heavy reliance on third-party infrastructure from Alphabet and Amazon creates the potential for service interruptions or algorithmic volatility.
MercadoLibre is highly sensitive to currency depreciation and political instability across various emerging markets in Latin America. Rapid changes in financial regulations or interest rate policies can directly impact the profitability of its lending and digital payment arms. It also competes with global giants like Amazon and new low-cost international entrants that pressure market pricing.
Valuation comparisonMercadoLibre trades at a higher Forward P/E than Etsy, reflecting its significantly higher revenue growth and expanding ecosystem.
MetricEtsyMercadoLibreSector BenchmarkForward P/E21.9x43.0x28.6xP/S ratio2.6x2.9xSector benchmark uses the SPDR XLY sector ETF.
Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.
While I like Etsy, especially as a likely oversold stock following its S&P 500 departure, its identity change from its “House of Brands” image is rather off-putting. I’m not saying it’s the wrong move, but it is a major about-face to sell Depop (secondhand fashion), Elo7 (Brazilian “Etsy”), and Reverb (secondhand musical instruments) -- for a major combined loss -- and I’d rather just see how the company’s core Etsy marketplace does in the next few quarters.
This is especially true, as the stock has already jumped by more than 50% over the last year. While active buyers on the Etsy platform grew sequentially for the first time in two years in the company’s latest quarter, sales from its continuing operations only rose 3%, and I just don’t see a clear catalyst for long-term double-digit growth at any point.
Meanwhile, MercadoLibre continues to fire on all cylinders, but its stock is down 35% over the last year. This disconnect looks like an opportunity to me, as the company currently trades at a somewhat lofty 43 times forward earnings but just grew sales by a stellar 49% in its latest quarter. Furthermore, MercadoLibre’s moat continues to grow wider as it builds a massive ecosystem of e-commerce, shipping, advertising, fintech solutions, lending products, and a loyalty program for its 84 million active buyers and 83 million fintech users.
Not only does the company have plenty of room to run in its three main countries: Brazil, Mexico, and Argentina, but it still has ample opportunity to continue expanding throughout all of Latin America, as well. As e-commerce and digital banking remain vastly underpenetrated in Latin America compared to Europe, China, and the U.S., I could only look to buy MercadoLibre when choosing between the two.
LOS ANGELES--(BUSINESS WIRE)--The Law Offices of Frank R. Cruz announces an investigation of MercadoLibre, Inc. (“MercadoLibre” or the “Company”) (NASDAQ: MELI) on behalf of investors concerning the Company’s possible violations of federal securities laws.
IF YOU ARE AN INVESTOR WHO LOST MONEY ON MERCADOLIBRE, INC. (MELI), CLICK HERE TO INQUIRE ABOUT POTENTIALLY PURSUING A CLAIM TO RECOVER YOUR LOSS.
What Is The Investigation About?
On May 7, 2026, MercadoLibre released its first quarter 2026 financial results and disclosed that loans which were “typically on average of 5 months” had now “moved to 8 months” and that the Company is “taking provisions in Brazil... related on the one hand, to extending the average term of our loans.”
On this news, MercadoLibre’s stock price fell $237.49, or 12.7%, to close at $1,632.52 per share on May 8, 2026, thereby injuring investors.
Contact Us To Participate or Learn More:
If you purchased MercadoLibre securities, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact us:
The Law Offices of Frank R. Cruz,
2121 Avenue of the Stars, Suite 800,
Century City, California 90067
Call us at: 310-914-5007
Visit our website at: www.frankcruzlaw.com.
Email us at: [email protected]
Follow us for updates on Twitter at twitter.com/FRC_LAW.
If you inquire by email, please include your mailing address, telephone number, and number of shares purchased.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.
