Mercadolibre (MELI)
NASDAQ:MELI
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Mercadolibre
(NASDAQ:MELI)
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Rating:67Neutral
Price Target:
$1,918.00
▲(16.99% Upside)
Action:DowngradedDate:02/26/26
The score is supported by strong financial performance (especially exceptional free cash flow and sustained growth) and a constructive earnings narrative around continued operating momentum. It is held back primarily by weak technicals (below key moving averages with negative MACD), elevated leverage, and a high P/E that increases sensitivity to the guided, investment-driven margin compression.
Positive Factors
Strong free cash flow generation
MercadoLibre's exceptionally large and growing free cash flow (TTM FCF ~ $10.1B, ~27% growth) provides durable internal funding for capex, strategic investments, and working capital. Strong cash conversion supports reinvestment in logistics/fintech while preserving optionality to de-risk leverage over the medium term.
Negative Factors
Elevated leverage vs equity
Net debt materially exceeds equity (debt-to-equity ~1.6) and has increased recently, raising sensitivity to funding costs and limiting financial flexibility. Even with strong FCF, higher absolute debt burdens covenant/funding risk and constrains capital allocation choices over the medium term if credit markets tighten.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong free cash flow generation
MercadoLibre's exceptionally large and growing free cash flow (TTM FCF ~ $10.1B, ~27% growth) provides durable internal funding for capex, strategic investments, and working capital. Strong cash conversion supports reinvestment in logistics/fintech while preserving optionality to de-risk leverage over the medium term.
Read all positive factors
Mercadolibre (MELI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$83.12B
Dividend YieldN/A
Average Volume (3M)616.78K
Price to Earnings (P/E)51.1
Beta (1Y)0.96
Revenue Growth38.01%
EPS Growth44.52%
CountryUS
Employees84,207
SectorConsumer Cyclical
Sector Strength84
IndustrySpecialty Retail
Share Statistics
EPS (TTM)11.03
Shares Outstanding50,697,180
10 Day Avg. Volume530,658
30 Day Avg. Volume616,776
Financial Highlights & Ratios
PEG Ratio11.34
Price to Book (P/B)15.13
Price to Sales (P/S)3.53
P/FCF Ratio9.48
Enterprise Value/Market Cap1.09
Enterprise Value/Revenue3.13
Enterprise Value/Gross Profit7.03
Enterprise Value/Ebitda26.49
Forecast
1Y Price Target
$2,545.00Price Target Upside55.23% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering10
EPS Forecast (FY)52.71
Revenue Forecast (FY)$38.21B
Mercadolibre Business Overview & Revenue Model
Company Description
MercadoLibre, Inc. operates online commerce platforms in Latin America. It operates Mercado Libre Marketplace, an automated online commerce platform that enables businesses, merchants, and individuals to list merchandise and conduct sales and purc...
How the Company Makes Money
Mercadolibre generates revenue through several key streams. The primary source is the fees charged to sellers for listing products and for transactional services on its marketplace platform. These fees include a percentage of the sale price and ad...
Mercadolibre Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
The Fly
The FlyMercadolibre Earnings Call Summary
Earnings Call Date:Feb 24, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 07, 2026
Earnings Call Sentiment Positive
The call emphasized very strong top-line growth across commerce, advertising and fintech (notable YoY gains: Q4 revenue +45%, ad revenue +67%, credit portfolio ~+100%, AUM +78%, GMV +35% in Brazil/Mexico) and clear AI-driven product and operational gains. Management acknowledged deliberate margin compression (5–6 p.p.) from strategic investments in shipping, 1P, cross-border and credit expansion, and flagged some localized margin and delinquency pressures (Argentina fulfillment costs, slight rise in early delinquencies). Overall, the positives (broad-based revenue/GMV growth, rapid fintech scale, ad acceleration, AI efficiencies, improving unit costs and record NPS) materially outweigh the manageable and largely intentional near-term challenges.Positive Updates
Strong Top-Line Growth
Fourth quarter net revenues grew 45% year-over-year; full-year revenues grew 39%; Q4 marked the 28th consecutive quarter of growth above 30%.
Negative Updates
Margin Compression from Strategic Investments
Management disclosed a 5–6 percentage point margin impact driven by investments (lower free-shipping thresholds, 1P expansion, cross-border trade expansion, credit card issuance and shipping capacity expansion).
Read all updates
Q4-2025 Updates
Positive
Negative
Strong Top-Line Growth
Fourth quarter net revenues grew 45% year-over-year; full-year revenues grew 39%; Q4 marked the 28th consecutive quarter of growth above 30%.
Read all positive updates
Company Guidance
Management’s guidance was that the company will keep making deliberate, growth‑oriented investments that they expect to compress margins by roughly 5–6 percentage points (driven by lower free‑shipping thresholds, 1P, cross‑border and credit‑card expansion) even as operating momentum continues: Q4 net revenues grew 45% YoY and full‑year revenues grew 39%, income from operations rose 22% for the year, and this was the 28th consecutive quarter of >30% growth; commerce trends include Brazil GMV +35% YoY with items sold +45% and Mexico GMV +35%, unit‑cost improvements in Brazil (helped by a slower delivery network), advertising revenue +67% YoY, acquiring TPV +25% in Brazil and +50% in Mexico; Mercado Pago metrics show MAUs growing ~30% for 10 consecutive quarters, the AI assistant resolving 87% of interactions, a credit portfolio of ~$12.5bn (nearly doubled YoY) with ~3m credit cards issued in Q4, and AUM near $19bn (+78% YoY); management reiterated they don’t provide formal forward guidance quarter‑by‑quarter, will continue to prioritize long‑term share and NPS gains while monitoring profitability improvements (older Brazil credit cohorts are NIMAL‑positive), and will provide Q1 disclosures in May.Mercadolibre Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
64
Positive
Cash Flow
90
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 28.89B | 20.78B | 15.11B | 10.78B | 7.07B |
| Gross Profit | 12.86B | 9.58B | 7.59B | 5.20B | 3.00B |
| EBITDA | 3.56B | 3.21B | 2.25B | 1.32B | 674.00M |
| Net Income | 2.00B | 1.91B | 987.00M | 482.00M | 83.00M |
Balance Sheet | |||||
| Total Assets | 42.67B | 25.20B | 17.61B | 13.74B | 10.10B |
| Cash, Cash Equivalents and Short-Term Investments | 6.30B | 3.75B | 3.75B | 3.03B | 2.79B |
| Total Debt | 11.39B | 6.85B | 5.33B | 5.41B | 3.98B |
| Total Liabilities | 35.92B | 20.84B | 14.54B | 11.91B | 8.57B |
| Stockholders Equity | 6.75B | 4.35B | 3.07B | 1.83B | 1.53B |
Cash Flow | |||||
| Free Cash Flow | 10.77B | 7.06B | 4.63B | 2.48B | 355.55M |
| Operating Cash Flow | 12.12B | 7.92B | 5.14B | 2.94B | 965.04M |
| Investing Cash Flow | -6.18B | -8.29B | -3.45B | -3.87B | -1.60B |
| Financing Cash Flow | 2.90B | 1.96B | -267.00M | 916.00M | 1.93B |
Mercadolibre Technical Analysis
Negative
1639.47
Price Trends
1922.25
Negative
2000.28
Negative
2180.16
Negative
Market Momentum
-78.32
Negative
36.07
Neutral
17.51
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MELI, the sentiment is Negative. The current price of 1639.47 is below the 20-day moving average (MA) of 1716.27, below the 50-day MA of 1922.25, and below the 200-day MA of 2180.16, indicating a bearish trend. The MACD of -78.32 indicates Negative momentum. The RSI at 36.07 is Neutral, neither overbought nor oversold. The STOCH value of 17.51 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MELI.
Mercadolibre Risk Analysis
Mercadolibre disclosed 1 risk factors in its most recent earnings report. Mercadolibre reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 1 New Risks
Mercadolibre Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $48.82B | 48.10 | 15.34% | ― | 35.85% | 1336.48% | |
70 Outperform | $142.85B | 11.22 | 29.30% | ― | 12.53% | -6.43% | |
67 Neutral | $83.12B | 51.14 | 33.73% | ― | 38.01% | 44.52% | |
67 Neutral | $40.12B | 19.34 | 42.68% | 1.38% | 4.89% | 17.30% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
55 Neutral | $4.64B | 33.41 | -15.36% | ― | 1.98% | -20.98% | |
53 Neutral | $34.37B | 206.19 | 4.52% | ― | 16.63% | -62.54% |
* Consumer Cyclical Sector Average
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Mercadolibre Corporate Events
Private Placements and Financing
MercadoLibre Issues $750M in Senior Unsecured Notes
Positive
Dec 5, 2025
On December 4, 2025, MercadoLibre, Inc. announced the successful issuance of USD 750 million in 2033 senior unsecured notes, marking its first transaction since achieving Investment Grade status. The offering was significantly oversubscribed, refl...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.