Investment Opportunities in MercadoLibre Stock
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy MELI?
Source: Fool
- Growth Amid Adversity: Despite cartel violence in Mexico and high inflation in Argentina impacting the business environment, MercadoLibre continues to thrive in the Latin American market by providing online shopping services through Mercado Pago, helping users cope with inflation and enhancing its market position.
- Sustained Revenue Growth: Revenue is projected to reach $25 billion in 2025, reflecting a 36% year-over-year increase, and while net income only grew by 5%, the company effectively addresses bad loans through AI evaluations and borrowing limits, demonstrating resilience amid rising competition.
- Attractive Valuation Levels: Although the stock has declined by approximately 22% over the past year, MercadoLibre's P/E ratio stands at 42, close to the market average, making it an attractive proposition for new investors considering its ongoing rapid growth.
- Long-term Investment Appeal: MercadoLibre transforms challenges into opportunities amid economic and political volatility, with rapid revenue growth and a valuation reminiscent of Amazon's earlier days, suggesting that the recent stock price decline may be a short-term anomaly, presenting a compelling buying opportunity for investors.
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Analyst Views on MELI
Wall Street analysts forecast MELI stock price to rise
11 Analyst Rating
10 Buy
1 Hold
0 Sell
Strong Buy
Current: 1740.880
Low
2500
Averages
2783
High
2950
Current: 1740.880
Low
2500
Averages
2783
High
2950
About MELI
MercadoLibre Inc is a Uruguay-based e-commerce business facilitator of Argentinian origins. The e-commerce products enable retail and wholesale via Internet platforms designed to provide users with a portfolio of services to facilitate commercial transactions. The Company's geographic coverage includes 18 countries of Latin America. The primary offer is an ecosystem of six integrated e-commerce services: the Mercado Libre Marketplace, the Mercado Libre Classifieds service, the Mercado Pago payments solution, the Mercado Credito financial solutions, the Mercado Envios logistic solutions including shipping, the Mercado Ads advertising platform and the Mercado Shops digital storefront solution.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
MercadoLibre Reports 45% Revenue Growth in Q4
- Significant Revenue Growth: MercadoLibre's Q4 revenue reached $8.76 billion, a 45% year-over-year increase that surpassed the $8.49 billion consensus, demonstrating strong performance in the Latin American e-commerce market despite margin compression challenges.
- Profit Pressure Intensifies: Despite robust revenue, earnings per share (EPS) fell 13% to $11.03, missing the $11.44 expectation, primarily due to operating margin compression from investments in growth initiatives like free shipping and credit cards.
- Fintech Business Thrives: The company's fintech segment saw monthly active users grow about 30% for the tenth consecutive quarter, with its credit card portfolio doubling year-over-year to $12.5 billion, indicating strong market demand and customer acceptance, while non-performing loans dropped to an all-time low of 4.4%.
- Surge in Ad Revenue: Advertising revenue soared 67% year-over-year, driven by the application of artificial intelligence that automated campaigns and optimized bidding algorithms, with management believing this will drive more online shopping and create additional advertising opportunities, further enhancing the company's competitive edge.
See More
Investment Opportunities in MercadoLibre Stock
- Growth Amid Adversity: Despite cartel violence in Mexico and high inflation in Argentina impacting the business environment, MercadoLibre continues to thrive in the Latin American market by providing online shopping services through Mercado Pago, helping users cope with inflation and enhancing its market position.
- Sustained Revenue Growth: Revenue is projected to reach $25 billion in 2025, reflecting a 36% year-over-year increase, and while net income only grew by 5%, the company effectively addresses bad loans through AI evaluations and borrowing limits, demonstrating resilience amid rising competition.
- Attractive Valuation Levels: Although the stock has declined by approximately 22% over the past year, MercadoLibre's P/E ratio stands at 42, close to the market average, making it an attractive proposition for new investors considering its ongoing rapid growth.
- Long-term Investment Appeal: MercadoLibre transforms challenges into opportunities amid economic and political volatility, with rapid revenue growth and a valuation reminiscent of Amazon's earlier days, suggesting that the recent stock price decline may be a short-term anomaly, presenting a compelling buying opportunity for investors.
See More
Investment Insights: MercadoLibre and Toast as Growth Stocks
- MercadoLibre Growth Momentum: Currently, MercadoLibre's stock is down 34% from its all-time high, yet it achieved a 45% year-over-year revenue growth in Q4 2025, marking its 28th consecutive quarter of over 30% growth, demonstrating a strong business flywheel effect, and despite trading at its lowest price-to-sales ratio since the Great Recession, it is still seen as a prime investment opportunity.
- User Growth and Market Share: The fintech user base for MercadoLibre grew by 27% in Q4, reaching 78 million users, which propelled a 37% increase in gross merchandise volume on its platform, indicating that the synergy among its various business segments is strengthening, further solidifying its leadership position in the Latin American e-commerce market.
- Toast's Profit Potential: In Q4 2025, Toast's annual recurring revenue (ARR) hit $2 billion, growing 26% year-over-year, with its subscription software solutions boasting a gross margin of 70%, showcasing strong growth potential in the restaurant technology sector; although initial customer acquisition impacts profits, it is expected to convert into a long-term profitability advantage.
- Market Competition and Valuation: Toast's stock has fallen nearly 50% from its highs, currently trading at 2.5 times sales; despite facing fierce market competition, management believes it has a path to achieving $10 billion in ARR, indicating an optimistic growth outlook in the restaurant industry.
See More
MercadoLibre Reports 45% Revenue Growth in Q4 Despite Margin Pressure
- Strong Revenue Growth: MercadoLibre's Q4 revenue surged 45% year-over-year to $8.76 billion, exceeding the $8.49 billion consensus, demonstrating robust performance in the Latin American e-commerce market despite margin pressures.
- Profitability Under Pressure: Despite significant revenue growth, the company's earnings per share (EPS) fell 13% to $11.03, missing the $11.44 expectation, primarily due to expenditures on growth investments such as free shipping and credit cards.
- Fintech Business Thriving: The fintech segment saw monthly active users grow approximately 30% for the tenth consecutive quarter, with the credit card portfolio doubling year-over-year to $12.5 billion, indicating strong market demand and customer acceptance.
- Surge in Ad Revenue: Advertising revenue jumped 67% year-over-year, driven by the application of artificial intelligence, which automated campaigns and optimized bidding algorithms, enabling the company to attract high-value merchants more quickly and expand online shopping and advertising opportunities.
See More
MercadoLibre and Dutch Bros: Huge Growth Potential
- MercadoLibre's Strong Growth: In Q4 2025, MercadoLibre achieved a 47% year-over-year revenue growth, with gross merchandise volume up 37% and total payment volume up 53%, indicating robust performance in the Latin American e-commerce and fintech sectors, which is expected to drive stock price increases.
- User Engagement Surge: The company saw a 24% increase in unique active buyers to over 83 million, with items sold rising 43%, demonstrating that the lower free shipping threshold in Brazil is attracting more consumers, creating a positive feedback loop that enhances market share.
- Dutch Bros Expansion Plans: Currently operating over 1,000 stores, Dutch Bros aims to expand to 7,000 locations in the coming years, with a target of reaching 2,029 stores by 2029, which is expected to significantly boost revenue and enhance profitability.
- Strong Financial Performance: Dutch Bros reported a 29% year-over-year sales increase in Q4, with comparable sales up 7.7% and net income rising from $6.4 million to $29.2 million, showcasing its strong growth potential in the coffee market and attracting long-term investor interest.
See More
MercadoLibre Reports Strong Q4 Growth Amid Profitability Concerns
- Performance Growth: MercadoLibre reported strong growth in the fourth quarter, showcasing resilience in market demand despite concerns over profitability, indicating a robust business performance overall.
- Stock Price Volatility: The stock has fallen 33% from its 52-week high, including a 10% drop following the earnings announcement, reflecting investor worries about future profitability which could impact the company's financing and expansion plans.
- Market Reaction: Despite the growth in performance, the market's focus on profitability has pressured the stock price, prompting investors to closely monitor the company's future profitability strategies and market positioning.
- Investor Focus: Shareholders should pay attention to how the company addresses profitability issues, especially in an increasingly competitive environment, to ensure sustained business growth and market share.
See More
MercadoLibre Reports 45% Revenue Growth in Q4
- Significant Revenue Growth: MercadoLibre's Q4 revenue reached $8.76 billion, a 45% year-over-year increase that surpassed the $8.49 billion consensus, demonstrating strong performance in the Latin American e-commerce market despite margin compression challenges.
- Profit Pressure Intensifies: Despite robust revenue, earnings per share (EPS) fell 13% to $11.03, missing the $11.44 expectation, primarily due to operating margin compression from investments in growth initiatives like free shipping and credit cards.
- Fintech Business Thrives: The company's fintech segment saw monthly active users grow about 30% for the tenth consecutive quarter, with its credit card portfolio doubling year-over-year to $12.5 billion, indicating strong market demand and customer acceptance, while non-performing loans dropped to an all-time low of 4.4%.
- Surge in Ad Revenue: Advertising revenue soared 67% year-over-year, driven by the application of artificial intelligence that automated campaigns and optimized bidding algorithms, with management believing this will drive more online shopping and create additional advertising opportunities, further enhancing the company's competitive edge.
See More
Investment Opportunities in MercadoLibre Stock
- Growth Amid Adversity: Despite cartel violence in Mexico and high inflation in Argentina impacting the business environment, MercadoLibre continues to thrive in the Latin American market by providing online shopping services through Mercado Pago, helping users cope with inflation and enhancing its market position.
- Sustained Revenue Growth: Revenue is projected to reach $25 billion in 2025, reflecting a 36% year-over-year increase, and while net income only grew by 5%, the company effectively addresses bad loans through AI evaluations and borrowing limits, demonstrating resilience amid rising competition.
- Attractive Valuation Levels: Although the stock has declined by approximately 22% over the past year, MercadoLibre's P/E ratio stands at 42, close to the market average, making it an attractive proposition for new investors considering its ongoing rapid growth.
- Long-term Investment Appeal: MercadoLibre transforms challenges into opportunities amid economic and political volatility, with rapid revenue growth and a valuation reminiscent of Amazon's earlier days, suggesting that the recent stock price decline may be a short-term anomaly, presenting a compelling buying opportunity for investors.
See More
Investment Insights: MercadoLibre and Toast as Growth Stocks
- MercadoLibre Growth Momentum: Currently, MercadoLibre's stock is down 34% from its all-time high, yet it achieved a 45% year-over-year revenue growth in Q4 2025, marking its 28th consecutive quarter of over 30% growth, demonstrating a strong business flywheel effect, and despite trading at its lowest price-to-sales ratio since the Great Recession, it is still seen as a prime investment opportunity.
- User Growth and Market Share: The fintech user base for MercadoLibre grew by 27% in Q4, reaching 78 million users, which propelled a 37% increase in gross merchandise volume on its platform, indicating that the synergy among its various business segments is strengthening, further solidifying its leadership position in the Latin American e-commerce market.
- Toast's Profit Potential: In Q4 2025, Toast's annual recurring revenue (ARR) hit $2 billion, growing 26% year-over-year, with its subscription software solutions boasting a gross margin of 70%, showcasing strong growth potential in the restaurant technology sector; although initial customer acquisition impacts profits, it is expected to convert into a long-term profitability advantage.
- Market Competition and Valuation: Toast's stock has fallen nearly 50% from its highs, currently trading at 2.5 times sales; despite facing fierce market competition, management believes it has a path to achieving $10 billion in ARR, indicating an optimistic growth outlook in the restaurant industry.
See More
MercadoLibre Reports 45% Revenue Growth in Q4 Despite Margin Pressure
- Strong Revenue Growth: MercadoLibre's Q4 revenue surged 45% year-over-year to $8.76 billion, exceeding the $8.49 billion consensus, demonstrating robust performance in the Latin American e-commerce market despite margin pressures.
- Profitability Under Pressure: Despite significant revenue growth, the company's earnings per share (EPS) fell 13% to $11.03, missing the $11.44 expectation, primarily due to expenditures on growth investments such as free shipping and credit cards.
- Fintech Business Thriving: The fintech segment saw monthly active users grow approximately 30% for the tenth consecutive quarter, with the credit card portfolio doubling year-over-year to $12.5 billion, indicating strong market demand and customer acceptance.
- Surge in Ad Revenue: Advertising revenue jumped 67% year-over-year, driven by the application of artificial intelligence, which automated campaigns and optimized bidding algorithms, enabling the company to attract high-value merchants more quickly and expand online shopping and advertising opportunities.
See More
MercadoLibre and Dutch Bros: Huge Growth Potential
- MercadoLibre's Strong Growth: In Q4 2025, MercadoLibre achieved a 47% year-over-year revenue growth, with gross merchandise volume up 37% and total payment volume up 53%, indicating robust performance in the Latin American e-commerce and fintech sectors, which is expected to drive stock price increases.
- User Engagement Surge: The company saw a 24% increase in unique active buyers to over 83 million, with items sold rising 43%, demonstrating that the lower free shipping threshold in Brazil is attracting more consumers, creating a positive feedback loop that enhances market share.
- Dutch Bros Expansion Plans: Currently operating over 1,000 stores, Dutch Bros aims to expand to 7,000 locations in the coming years, with a target of reaching 2,029 stores by 2029, which is expected to significantly boost revenue and enhance profitability.
- Strong Financial Performance: Dutch Bros reported a 29% year-over-year sales increase in Q4, with comparable sales up 7.7% and net income rising from $6.4 million to $29.2 million, showcasing its strong growth potential in the coffee market and attracting long-term investor interest.
See More
MercadoLibre Reports Strong Q4 Growth Amid Profitability Concerns
- Performance Growth: MercadoLibre reported strong growth in the fourth quarter, showcasing resilience in market demand despite concerns over profitability, indicating a robust business performance overall.
- Stock Price Volatility: The stock has fallen 33% from its 52-week high, including a 10% drop following the earnings announcement, reflecting investor worries about future profitability which could impact the company's financing and expansion plans.
- Market Reaction: Despite the growth in performance, the market's focus on profitability has pressured the stock price, prompting investors to closely monitor the company's future profitability strategies and market positioning.
- Investor Focus: Shareholders should pay attention to how the company addresses profitability issues, especially in an increasingly competitive environment, to ensure sustained business growth and market share.
See More
