Mercadolibre (MELI) AI Stock Analysis

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Mercadolibre

(NASDAQ:MELI)

Rating:80Outperform

Price Target:

$2,887.00

▲(21.71%Upside)

Mercadolibre's overall stock score reflects its strong financial performance and positive earnings outlook, supported by robust growth in e-commerce and fintech sectors. The stock's current technical indicators suggest strong momentum, though caution is advised due to overbought conditions. High valuation metrics indicate market confidence in future growth, offset by the absence of dividends. Strategic initiatives and market position bolster the company's long-term growth potential.

Positive Factors

Advertising Revenue

MELI's advertising revenue is expected to grow significantly, reflecting its leadership in digital retail media.

Logistics Investments

MELI is stepping up its logistics investments in Brazil to accelerate growth and widen competitive moats.

Service Improvement

MELI has improved speeds and service levels while reducing delivery costs for customers and sellers, which is a powerful combination to increase online demand.

Negative Factors

Competitive Pressure

A recent Riwi survey indicates potentially increased competition in the e-commerce space for MELI in Brazil from overseas players.

Earnings Volatility

Potential earnings volatility is expected, namely gross margin pressure in Brazil.

Margin Pressure

A yellow flag is raised for the short-term due to potential gross margin pressure.

Mercadolibre (MELI) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$120.25B

Dividend YieldN/A

Average Volume (3M)380.20K

Price to Earnings (P/E)58.3

Beta (1Y)1.04

Revenue Growth41.92%

EPS Growth81.11%

CountryUS

Employees84,207

SectorConsumer Cyclical

Sector Strength58

IndustrySpecialty Retail

Share Statistics

EPS (TTM)9.74

Shares Outstanding50,697,376

10 Day Avg. Volume382,877

30 Day Avg. Volume380,202

Financial Highlights & Ratios

PEG Ratio-3.43

Price to Book (P/B)25.41

Price to Sales (P/S)0.00

P/FCF Ratio16.79

Enterprise Value/Market Cap1.03

Enterprise Value/Revenue1.57

Enterprise Value/Gross Profit12.00

Enterprise Value/Ebitda10.43

Forecast

1Y Price Target

$2,872.92

Price Target Upside21.12% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering14

Mercadolibre Business Overview & Revenue Model

Company DescriptionMercadoLibre, Inc. (MELI) is a leading e-commerce and technology company operating in Latin America. Founded in 1999 and headquartered in Buenos Aires, Argentina, MercadoLibre offers a wide array of services including an online marketplace for buying and selling products, fintech solutions through Mercado Pago, logistics services under Mercado Envios, and digital advertising. The company's platform connects millions of users across multiple countries, facilitating transactions in various sectors such as electronics, fashion, automotive, and more.

How the Company Makes MoneyMercadoLibre makes money primarily through its e-commerce platform by charging transaction fees to sellers on its marketplace. The company also generates significant revenue from its fintech arm, Mercado Pago, which offers payment processing solutions and financial services such as credit lines and investment products. Additionally, Mercado Envios contributes to revenue by providing logistics and fulfillment services. Digital advertising on the platform represents another growing revenue stream, as businesses pay to promote their products to MercadoLibre's vast user base. Strategic partnerships with financial institutions and other technology providers further enhance its service offerings and contribute to its earnings.

Mercadolibre Key Performance Indicators (KPIs)

Any

Assets Under Management

Assets Under Management
Shows the total value of assets managed by the company, highlighting the scale of its investment services and financial health.

Chart InsightsMercadoLibre's Assets Under Management have shown remarkable growth, more than tripling from early 2023 to early 2025. This surge aligns with the company's strategic expansion in fintech, evidenced by the doubling of its credit card portfolio and a 74% increase in its credit portfolio. The robust growth in AUM reflects MercadoLibre's successful penetration into the Latin American financial market, despite credit risks in Brazil and economic challenges in Argentina. The company's strategic investments in logistics and user experience further bolster its position as a leading digital financial player in the region.

Data provided by:

Main Street Data

Mercadolibre Earnings Call Summary

Earnings Call Date:May 07, 2025

(Q1-2025)

% Change Since: 4.86%|

Next Earnings Date:Jul 31, 2025

Earnings Call Sentiment Positive

The earnings call reflects a positive overall sentiment with significant growth in e-commerce and fintech segments, strong performance in Argentina, and strategic improvements in product offerings. While there are challenges, particularly in the technology segment in Mexico and short-term margin pressures from credit card investments, the company's long-term growth prospects remain robust.

Q1-2025 Updates

Positive Updates

E-commerce and Fintech Growth

MercadoLibre continues to deliver strong growth across both e-commerce and fintech, with monthly active users in fintech services growing over 30% year-on-year, reaching 64 million.

Credit Portfolio Expansion

The company's credit portfolio grew by 75% year-on-year, with improvements in scoring models and profitability, particularly in Brazil where first payment defaults reached an all-time low.

Exceptional Performance in Argentina

Argentina's revenue more than doubled year-on-year in USD terms, with a 126% GMV growth and significant improvement in contribution margins, supported by a stabilized macroeconomic environment.

Brand Preference and User Engagement

Brand preference metrics for MercadoLibre's marketplace reached all-time highs in Brazil, Mexico, Argentina, and Chile, indicating strong user engagement and market position.

Fintech Product Enhancements

Introduction of a new branding for Mercado Pago and improvements in the user experience to position as the primary financial relationship for users in Latin America.

Supermarket Segment Growth

Supermarket category grew 65% year-over-year, outpacing other categories, with improvements in value proposition and increased 1P share providing better unit economics.

Negative Updates

Competitive Pressures in Technology Segment

In Mexico, the technology vertical underperformed due to aggressive competition and lack of selection, although corrective measures are being implemented.

Credit Card Margin Pressure

Investments in credit card offerings in Brazil and Mexico are creating short-term margin pressure, although they are necessary for long-term growth.

Company Guidance

In the recent earnings call for MercadoLibre, the company highlighted several key metrics and strategic initiatives that are driving their growth. In Q1 2025, MercadoLibre reported a 30% year-on-year increase in monthly active users, reaching a total of 64 million. The company's credit portfolio grew by 75% year-on-year, with improvements in delinquency rates, particularly in Brazil where first payment defaults hit an all-time low. Argentina also demonstrated strong performance, with U.S. dollar revenues more than doubling year-on-year and a 126% increase in GMV. The company's income from operations grew at a faster rate than revenue, supported by these robust performances. MercadoLibre's investments in branding and user experience, particularly in their fintech services, have proven effective in enhancing user engagement and consolidating their market position across Latin America.

Mercadolibre Financial Statement Overview

Summary

Mercadolibre exhibits a strong financial position with consistent revenue growth, healthy profitability, and robust cash flow generation. The company's low leverage and high return on equity are indicative of its efficient financial management. While the equity ratio suggests moderate reliance on equity, the overall financial health supports continued growth and resilience against industry challenges.

Income Statement

Very Positive

Mercadolibre demonstrates strong revenue growth with a TTM revenue increase from $20.8B to $21.8B, showing consistent expansion. The gross profit margin is robust at 47.4%, and the net profit margin is healthy at 9.5%, indicating effective cost management and profitability. EBITDA and EBIT margins are solid at 15.3% and 13.2%, respectively, showcasing operational efficiency. The company's consistent revenue growth and profitability margins position it well within its industry.

Balance Sheet

Positive

The balance sheet reflects a stable financial position with a manageable debt-to-equity ratio of 0.26, suggesting low leverage. The return on equity of 41.2% indicates excellent profitability relative to shareholder equity, driven by strong net income. The equity ratio stands at 18.1%, showing moderate reliance on equity financing. While the company maintains a strong equity position, greater equity financing could enhance financial stability.

Cash Flow

Very Positive

Mercadolibre's cash flow is strong, with a free cash flow of $7.57B, reflecting a significant increase from $7.06B, and an impressive operating cash flow to net income ratio of 3.75, indicating robust cash generation from operations. The free cash flow to net income ratio of 3.67 highlights efficient conversion of income to cash. The company's ability to generate substantial cash flow supports its financial flexibility and growth potential.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
21.76B	20.78B	14.47B	10.54B	7.07B	3.97B
	Gross Profit
10.32B	9.58B	7.21B	5.16B	3.01B	1.71B
	EBIT
2.87B	2.63B	1.82B	1.03B	440.70M	230.46M
	EBITDA
3.32B	3.25B	2.29B	1.36B	614.28M	269.30M
	Net Income Common Stockholders
2.06B	1.91B	987.00M	482.00M	83.00M	-707.00K
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
3.75B	3.75B	7.33B	3.03B	2.79B	2.46B
	Total Assets
19.06B	25.20B	17.65B	13.74B	10.10B	6.53B
	Total Debt
5.29B	6.85B	5.33B	5.41B	3.98B	1.71B
	Net Debt
2.71B	4.21B	2.78B	3.50B	1.40B	-148.28M
	Total Liabilities
15.67B	20.84B	14.57B	11.91B	8.57B	4.87B
	Stockholders Equity
3.39B	4.35B	3.07B	1.83B	1.53B	1.65B
Cash Flow		Free Cash Flow
7.57B	7.06B	4.63B	2.48B	355.55M	935.41M
	Operating Cash Flow
7.73B	7.92B	5.14B	2.94B	965.04M	1.18B
	Investing Cash Flow
-8.38B	-8.29B	-3.45B	-3.87B	-1.60B	-252.18M
	Financing Cash Flow
2.68B	1.96B	-267.00M	916.00M	1.93B	242.27M

Mercadolibre Technical Analysis

Technical Analysis Sentiment

Positive

Last Price2371.98

Price Trends

50DMA

2320.73

Positive

100DMA

2174.75

Positive

200DMA

2065.67

Positive

Market Momentum

MACD

8.41

Positive

RSI

40.65

Neutral

STOCH

12.19

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MELI, the sentiment is Positive. The current price of 2371.98 is below the 20-day moving average (MA) of 2523.98, above the 50-day MA of 2320.73, and above the 200-day MA of 2065.67, indicating a neutral trend. The MACD of 8.41 indicates Positive momentum. The RSI at 40.65 is Neutral, neither overbought nor oversold. The STOCH value of 12.19 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MELI.

Mercadolibre Risk Analysis

Mercadolibre disclosed 42 risk factors in its most recent earnings report. Mercadolibre reported the most risks in the "Finance & Corporate" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Mercadolibre Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BABA	81 Outperform	$272.22B	14.78	13.04%	0.87%	4.28%	28.42%
MELI	80 Outperform	$120.25B	58.35	49.11%	―	41.92%	81.11%
SE	77 Outperform	$91.40B	108.57	11.13%	―	30.18%	1995.22%
EBAY	77 Outperform	$35.66B	18.49	36.48%	1.50%	2.04%	-15.61%
CPNG	74 Outperform	$51.02B	203.18	6.06%	―	20.88%	-80.08%
ETSY	68 Neutral	$5.84B	39.77	-39.97%	―	2.18%	-32.87%
Sector *	62 Neutral	$6.82B	11.05	2.80%	4.32%	2.67%	-24.92%

* Consumer Cyclical Sector Average

Performance Comparison

MELI

Mercadolibre

2,371.98

812.75

52.13%

EBAY

eBay

77.36

25.13

48.11%

BABA

Alibaba

112.87

39.55

53.94%

ETSY

Etsy

55.99

-2.71

-4.62%

Sea

154.38

79.46

106.06%

CPNG

Coupang

28.10

7.56

36.81%

Mercadolibre Corporate Events

Executive/Board ChangesBusiness Operations and Strategy

MercadoLibre Announces Leadership Transition Effective 2026

Neutral

May 21, 2025

On May 16, 2025, MercadoLibre, Inc. announced a leadership transition effective January 1, 2026. Marcos Galperin will move to a strategic role as Executive Chairman, while Ariel Szarfsztejn, currently the Commerce President, will assume the role of President and CEO. Szarfsztejn, who joined the company in 2017, has held various leadership roles, and his appointment signals a continued focus on strategic growth and development within the company.

The most recent analyst rating on (MELI) stock is a Buy with a $2250.00 price target. To see the full list of analyst forecasts on Mercadolibre stock, see the MELI Stock Forecast page.

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.