MELI Should I Buy
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MercadoLibre (MELI) is a good buy for a beginner investor with a long-term strategy and $50,000-$100,000 available for investment. The company's strong revenue growth, analyst upgrades, and reduced competitive pressures in its core markets make it a favorable investment. Despite some technical weakness, the long-term fundamentals and positive sentiment outweigh short-term concerns.
The technical indicators show a bearish trend with the MACD below zero and negatively contracting, RSI at 34.177 in the neutral zone, and bearish moving averages (SMA_200 > SMA_20 > SMA_5). Key support is at 1944.691, and resistance is at 2064.516. The stock is currently trading below its pivot level, indicating potential short-term weakness.
JPMorgan upgraded the stock to 'Overweight' with a price target of $2,800, citing reduced competitive pressures and strong growth potential in Brazil.
MercadoLibre's fintech arm is growing due to increased adoption of digital payments in Latin America.
Revenue increased by 39.48% YoY in Q3 2025, showcasing strong business momentum.
A 58% increase in provisions for bad loans in the fintech arm has slowed profit growth.
Gross margin dropped by 5.66% YoY in Q3 2025, indicating rising costs.
Technical indicators suggest short-term bearishness.
In Q3 2025, MercadoLibre reported a revenue increase of 39.48% YoY to $7.41 billion, net income growth of 6.05% YoY to $421 million, and EPS growth of 6.00% YoY to $8.3. However, gross margin declined to 43.31%, down 5.66% YoY.
Analysts are positive on the stock, with JPMorgan upgrading it to 'Overweight' and raising the price target to $2,800. Other firms like Wedbush and Citi maintain positive ratings despite some concerns around competition and costs.
