MELI Should I Buy
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MercadoLibre Inc (MELI) is not an ideal buy for a beginner investor with a long-term strategy at this moment. Despite strong revenue growth and promising fintech expansion, the stock faces margin pressures, bearish technical indicators, and cautious analyst sentiment. Waiting for clearer signs of margin stabilization and improved technical trends would be prudent.
The technical indicators for MELI are bearish. The MACD histogram is negative (-15.458) and contracting, RSI is neutral at 40.217, and moving averages are bearish (SMA_200 > SMA_20 > SMA_5). The stock is trading below its pivot level (1827.945), with key support at 1688.015 and resistance at 1967.876.
Revenue growth of 44.56% YoY in Q4
Gross merchandise volume increased by 37% YoY, and total payment volume rose by 53%.
Unique active buyers rose by 24% YoY, with plans to expand digital banking in Mexico and Argentina.
Long-term revenue growth projections of 20%-25% annually over the next three years.
Net income and EPS declined by 12.52% and 12.46% YoY, respectively, in Q4
Gross margin dropped to 43.2%, down 4.78% YoY, reflecting margin pressures.
Analysts have lowered price targets recently, citing competitive pressures and high logistics costs.
The Motley Fool excluded MELI from its top investment stocks, reflecting cautious sentiment.
In Q4 2025, MercadoLibre reported revenue of $8.759 billion, up 44.56% YoY. However, net income dropped to $559 million (-12.52% YoY), and EPS fell to $11.03 (-12.46% YoY). Gross margin declined to 43.2%, down 4.78% YoY, indicating margin pressures.
Analysts have recently lowered price targets for MELI, with the consensus remaining constructive but cautious. Key firms like JPMorgan, Morgan Stanley, and Barclays maintain Overweight ratings but highlight margin pressures and competitive challenges as near-term risks.
