Mercadolibre (MELI) AI Stock Analysis

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Mercadolibre

(NASDAQ:MELI)

77Outperform

MercadoLibre's strong financial performance and positive earnings call insights are the primary drivers of its high score. Technical analysis suggests continued upward momentum, though caution is advised due to potential overvaluation. The absence of a dividend yield and high P/E ratio reflect a growth-oriented strategy, which may pose risks if growth slows.

Positive Factors

Earnings

MELI delivered a strong quarter, meaningfully exceeding consensus expectations on both revenue and profitability.

Geographic Performance

Argentina emerged as a key geographic performer, with significant macroeconomic improvement and impressive growth in both items sold and fintech revenue.

Negative Factors

Macroeconomic Risks

Key downside risks include macroeconomic and foreign exchange volatility, rising competition, and investment induced margin uncertainties.

Profit Margins

Mercadolibre is considering launching credit cards in Argentina, which could introduce a challenge to future profit margins.

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

Market Cap

$113.00B

Dividend YieldN/A

Average Volume (3M)443.50K

Price to Earnings (P/E)59.1

Beta (1Y)1.05

Revenue Growth41.92%

EPS Growth81.11%

CountryUS

Employees84,207

SectorConsumer Cyclical

Sector Strength60

IndustrySpecialty Retail

Share Statistics

EPS (TTM)9.74

Shares Outstanding50,697,376

10 Day Avg. Volume348,432

30 Day Avg. Volume443,503

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap0.76

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit8.96

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$2,751.25

Price Target Upside12.30% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering13

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 generates revenue through multiple streams, primarily from its e-commerce platform. The company earns from transaction fees charged to sellers for each sale made on its marketplace. Additionally, its payment solution, Mercado Pago, contributes significantly to revenue by charging fees for processing payments both on and off its platform. The logistics arm, Mercado Envios, adds to the revenue by offering shipping solutions that attract fees from sellers opting for their services. Another growing revenue stream is Mercado Credito, which provides loans to both buyers and sellers, earning interest income. Partnerships with local and international businesses also play a role in expanding MercadoLibre's service offerings and revenue potential.

Mercadolibre Key Performance Indicators (KPIs)

Any

Assets Under Management

Assets Under Management
Reflects the total value of assets managed, indicating the scale of Mercadolibre's financial services and its influence in the investment sector.

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 Financial Statement Overview

Summary

Mercadolibre demonstrates strong financial performance with robust revenue and profit growth, solid balance sheet with moderate leverage, and effective cash flow management.

Income Statement

―

Mercadolibre has shown strong revenue growth with a significant increase from $14.47 billion in 2023 to $18.64 billion in 2024. The gross profit margin is robust at 51.36%, and the net profit margin has improved to 10.25%. Both EBIT and EBITDA margins are healthy, indicating efficient operational performance. Overall, the company is demonstrating strong growth and profitability trends.

Balance Sheet

The balance sheet reflects a good equity position with a debt-to-equity ratio of 0.26, indicating moderate leverage. The return on equity (ROE) is impressive at 43.92%, highlighting strong profitability relative to equity. The equity ratio stands at 17.27%, suggesting a stable financial structure, although room for improvement exists in terms of increasing equity relative to total assets.

Cash Flow

―

Mercadolibre's cash flow is strong, with free cash flow showing significant growth. The operating cash flow to net income ratio is favorable at 4.14, indicating efficient cash generation relative to net income. The free cash flow to net income ratio complements this at 4.14, underscoring healthy cash management practices. The company is effectively converting its income into cash, supporting its growth trajectory.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
20.78B	14.47B	10.54B	7.07B	3.97B
	Gross Profit
9.58B	7.21B	5.16B	3.01B	1.71B
	EBIT
2.63B	1.82B	1.03B	440.70M	230.46M
	EBITDA
3.25B	2.29B	1.36B	614.28M	269.30M
	Net Income Common Stockholders
1.91B	987.00M	482.00M	83.00M	-707.00K
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
9.18B	7.33B	3.03B	2.79B	2.46B
	Total Assets
25.20B	17.65B	13.74B	10.10B	6.53B
	Total Debt
6.85B	5.33B	5.41B	3.98B	1.71B
	Net Debt
4.21B	2.78B	3.50B	1.40B	-148.28M
	Total Liabilities
20.84B	14.57B	11.91B	8.57B	4.87B
	Stockholders Equity
4.35B	3.07B	1.83B	1.53B	1.65B
Cash Flow		Free Cash Flow
7.06B	4.63B	2.48B	355.55M	935.41M
	Operating Cash Flow
7.92B	5.14B	2.94B	965.04M	1.18B
	Investing Cash Flow
-8.29B	-3.45B	-3.87B	-1.60B	-252.18M
	Financing Cash Flow
1.96B	-267.00M	916.00M	1.93B	242.27M

Mercadolibre Technical Analysis

Technical Analysis Sentiment

Positive

Last Price2450.00

Price Trends

50DMA

2088.79

Positive

100DMA

1992.18

Positive

200DMA

1983.14

Positive

Market Momentum

MACD

88.29

Negative

RSI

70.36

Negative

STOCH

66.80

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 2450 is above the 20-day moving average (MA) of 2203.22, above the 50-day MA of 2088.79, and above the 200-day MA of 1983.14, indicating a bullish trend. The MACD of 88.29 indicates Negative momentum. The RSI at 70.36 is Negative, neither overbought nor oversold. The STOCH value of 66.80 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 (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BABA	81 Outperform	$304.76B	17.80	11.97%	0.78%	4.28%	28.42%
EBAY	78 Outperform	$32.44B	16.80	36.48%	1.58%	2.04%	-15.61%
MELI	77 Outperform	$113.00B	59.13	49.11%	―	41.92%	81.11%
SE	76 Outperform	$83.52B	190.97	5.93%	―	28.46%	185.04%
CPNG	68 Neutral	$43.75B	289.38	6.06%	―	20.88%	-80.08%
Sector *	61 Neutral	$6.66B	11.77	3.06%	3.96%	2.60%	-21.54%
ETSY	60 Neutral	$4.70B	32.05	-39.97%	―	2.18%	-32.87%

* Consumer Cyclical Sector Average

Performance Comparison

MELI

Mercadolibre

2,450.00

756.03

44.63%

EBAY

eBay

69.51

19.44

38.83%

BABA

Alibaba

125.33

46.97

59.94%

ETSY

Etsy

46.94

-14.98

-24.19%

Sea

139.17

74.26

114.40%

CPNG

Coupang

26.00

3.50

15.56%

Mercadolibre Earnings Call Summary

Earnings Call Date:May 07, 2025

(Q1-2025)

% Change Since: 8.31%|

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.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.