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Mercadolibre (MELI)
NASDAQ:MELI

Mercadolibre (MELI) AI Stock Analysis

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Mercadolibre

(NASDAQ:MELI)

Rating:74Outperform
Price Target:
$2,691.00
▲(7.04%Upside)
MercadoLibre exhibits strong financial health and positive earnings call sentiment, which are major strengths. However, high valuation and mixed technical indicators present potential risks. Despite these concerns, the company's strategic initiatives in e-commerce and fintech are expected to drive long-term growth.
Positive Factors
Advertising Platform
The integration with Google Authorized Buyers allows MELI to offer display advertisers access to about 30,000 off-platform sites and apps, enhancing programmatic ad reach.
Credit Card Expansion
Management is increasing its commitment to expanding its credit card program and reach.
Logistics Investment
MELI is stepping up its logistics investments in Brazil to accelerate growth and widen competitive moats.
Negative Factors
Competitive Pressure
MELI's ad platform continues to face considerable competition from other digital advertising alternatives, impacting its advertising penetration rates.
GMV Deceleration Risk
Downside risk could be achieved by GMV deceleration or encroachment by competitors.

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

Mercadolibre Business Overview & Revenue Model

Company DescriptionMercadoLibre, 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 purchases online; and Mercado Pago FinTech platform, a financial technology solution platform, which facilitates transactions on and off its marketplaces by providing a mechanism that allows its users to send and receive payments online, as well as allows users to transfer money through their websites or on the apps. The company also offers Mercado Fondo that allows users to invest funds deposited in their Mercado Pago accounts; Mercado Credito, which extends loans to certain merchants and consumers; and Mercado Envios logistics solution that enables sellers on its platform to utilize third-party carriers and other logistics service providers, as well as fulfillment and warehousing services for sellers. In addition, it provides Mercado Libre Classifieds, an online classified listing service, where users can list and purchase motor vehicles, real estate, and services; Mercado Libre Ads, an advertising platform, which enables large retailers and brands to promote their products and services on the Internet; and Mercado Shops, an online storefronts solution that enables users to set-up, manage, and promote their own digital stores. MercadoLibre, Inc. was incorporated in 1999 and is headquartered in Montevideo, Uruguay.
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
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: 11.14%|
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 demonstrates strong financial performance with consistent revenue growth, healthy profitability margins, and robust cash flow generation. The company's low leverage and high return on equity indicate efficient financial management, supporting continued growth and resilience against industry challenges.
Income Statement
85
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
78
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
82
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue21.76B20.78B14.47B10.54B7.07B3.97B
Gross Profit10.32B9.58B7.21B5.16B3.01B1.71B
EBITDA3.32B3.25B2.29B1.36B614.28M269.30M
Net Income2.06B1.91B987.00M482.00M83.00M-707.00K
Balance Sheet
Total Assets27.68B25.20B17.65B13.74B10.10B6.53B
Cash, Cash Equivalents and Short-Term Investments3.72B3.75B7.33B3.03B2.79B2.46B
Total Debt7.72B6.85B5.33B5.41B3.98B1.71B
Total Liabilities22.68B20.84B14.57B11.91B8.57B4.87B
Stockholders Equity5.00B4.35B3.07B1.83B1.53B1.65B
Cash Flow
Free Cash Flow7.57B7.06B4.63B2.48B355.55M935.41M
Operating Cash Flow7.73B7.92B5.14B2.94B965.04M1.18B
Investing Cash Flow-8.38B-8.29B-3.45B-3.87B-1.60B-252.18M
Financing Cash Flow2.68B1.96B-267.00M916.00M1.93B242.27M

Mercadolibre Technical Analysis

Technical Analysis Sentiment
Positive
Last Price2514.05
Price Trends
50DMA
2452.16
Positive
100DMA
2250.18
Positive
200DMA
2095.29
Positive
Market Momentum
MACD
22.18
Negative
RSI
53.34
Neutral
STOCH
45.18
Neutral
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 2514.05 is above the 20-day moving average (MA) of 2471.57, above the 50-day MA of 2452.16, and above the 200-day MA of 2095.29, indicating a bullish trend. The MACD of 22.18 indicates Negative momentum. The RSI at 53.34 is Neutral, neither overbought nor oversold. The STOCH value of 45.18 is Neutral, 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
77
Outperform
$258.26B14.2413.04%1.82%5.17%74.55%
77
Outperform
$35.20B18.2536.48%1.52%2.04%-15.61%
74
Outperform
$127.46B61.8449.11%41.92%81.11%
SESE
74
Outperform
$88.49B105.1111.13%30.18%1995.22%
74
Outperform
$54.99B219.026.06%20.88%-80.08%
64
Neutral
$5.67B38.62-39.97%2.18%-32.87%
62
Neutral
$16.85B11.50-7.38%2.96%1.59%-23.36%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
MELI
Mercadolibre
2,514.05
830.30
49.31%
EBAY
eBay
76.36
24.48
47.19%
BABA
Alibaba
108.70
36.41
50.37%
ETSY
Etsy
54.37
-1.00
-1.81%
SE
Sea
149.47
76.51
104.87%
CPNG
Coupang
30.29
8.88
41.48%

Mercadolibre Corporate Events

Executive/Board ChangesShareholder Meetings
MercadoLibre Holds Annual Stockholders Meeting 2025
Positive
Jun 18, 2025

On June 17, 2025, MercadoLibre, Inc. held its Annual Meeting of Stockholders to elect Class I and Class III directors, approve executive compensation for fiscal year 2024, and ratify the appointment of its independent public accounting firm for 2025. The stockholders successfully elected all director nominees, approved the executive compensation, and ratified the accounting firm appointment, indicating strong shareholder support for the company’s governance and financial oversight.

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.

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.Date of analysis: Jun 19, 2025