MELI Should I Buy
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MercadoLibre is not a clean buy right now for a Beginner long-term investor with $50,000-$100,000 to deploy. The business fundamentals are strong, but the current setup is mixed: the stock is in a bearish technical trend, analyst estimates have been cut broadly after a weaker profitability quarter, and congress/insider activity is not supportive. I would wait for a clearer technical reversal or a better entry rather than buying aggressively at current levels. Since the investor is impatient and unwilling to wait for an optimal entry, my direct call is still HOLD, not buy.
The current technical picture is weak. MELI is trading pre-market at 1627.87, up 1.11%, but the trend remains bearish overall. MACD histogram is -1.771, below zero and still negative, which shows downside momentum remains in place. RSI_6 at 41.8 is neutral-to-weak, not oversold enough to signal a strong rebound. Moving averages are bearish with SMA_200 > SMA_20 > SMA_5, confirming the broader downtrend. Price is below the pivot level of 1640.994 and only slightly above support at 1569.262, so the stock is still vulnerable. The short-term pattern analysis also points to weakness, with a projected -1.37% next week and -1.19% next month.
Revenue growth remains very strong, with reported growth around 46% year-over-year and continued expansion in GMV, TPV, and the user base. Analysts across several firms still maintain Buy/Overweight/Strong Buy views despite cutting targets. Long-term bulls argue MELI’s investments should deepen its competitive moat and support future revenue and margin recovery. The company remains one of the strongest platform-growth stories in Latin America.
The latest quarter showed margin pressure, with EBIT margin falling to 9.6% due to heavy investment spending. The stock sold off sharply after the report, showing the market is focused on profitability compression. Multiple analysts lowered price targets, and Citi downgraded the stock to Neutral. JPMorgan noted the competitive cycle will continue weighing on margins, and several firms turned more cautious on the pace of monetization and margin recovery. Congress trading data also shows one sale and no purchases, which leans negative. Hedge funds and insiders are neutral with no strong buying trend.
Latest quarter appears to be Q1 2026. Financially, MercadoLibre posted very strong top-line growth, with revenue up about 46% year-over-year to $31.8 billion, and other operating metrics such as GMV and TPV also beating estimates. However, profitability weakened materially as EBIT margin dropped to 9.6% due to infrastructure and customer acquisition investments. This is a strong growth quarter but a softer earnings-quality quarter, which explains the market's negative reaction.
Analyst sentiment is mixed but still constructive overall. Goldman Sachs kept a Buy rating but cut its target to $2,100 from $2,440. Morgan Stanley and Barclays remain Overweight, while BTIG and Raymond James stay bullish despite lowering targets. On the negative side, UBS and JPMorgan are Neutral, Citi downgraded to Neutral from Buy, and Daiwa downgraded to Hold. The trend is clearly toward lower price targets and more caution on margins, but the Wall Street pros still lean more positive than negative on the long-term story.
