Core Viewpoint - The price per share of MercadoLibre does not accurately reflect its value, and it is considered a bargain for long-term investors despite its high trading price [1][2]. Company Overview - MercadoLibre has experienced significant growth, with its stock price increasing over 7,000% since its IPO nearly 20 years ago [3]. - The company is currently led by CEO and co-founder Marcos Galperin, who will step down in 2025, raising concerns about leadership transition [3][4]. Financial Performance - MercadoLibre's net profit margin decreased from 10.5% in Q2 2024 to 7.7% in Q2 2025, resulting in an estimated loss of $200 million in that quarter [5]. - The decline in profit margins is attributed to changes in exchange rates and adjustments in the cost structure of its e-commerce marketplace [7][8]. Management Stability - The new CEO, Ariel Szarfsztejn, has a history with MercadoLibre, which may provide stability during the transition [6]. - Concerns regarding the leadership change are deemed premature, as the company has a solid foundation [6]. Growth Potential - MercadoLibre is focused on increasing product and service adoption through investments in logistics, financial services, and credit offerings [9]. - The company has approximately 71 million active buyers, with a significant portion of commerce revenue coming from Brazil, indicating room for growth [10]. Advertising Revenue - The emerging advertising business could offset losses from profit margin contractions, suggesting a strategic move that may benefit the company in the long run [11]. Valuation - MercadoLibre's stock is currently trading at less than 5 times its sales, which is considered an attractive valuation for potential investors [11]. - Despite the recent contraction in profit margins, the company remains profitable and is expected to continue growing [13].

Core Insights - Mercadolibre (MELI) has become a focal point amid recent market volatility, with its stock price dropping by 3.29% on October 3 [1] - The decline in Mercadolibre's stock price is influenced by eBay's announcement to sell 5.5 million shares, expected to raise over $1 billion, which increases market supply pressure [1] - Despite recent fluctuations, Mercadolibre's stock has risen by 39.96% since the beginning of the year, prompting investors to reassess the stock's value [1] Market Dynamics - eBay's share sale eliminates any potential acquisition premium, contributing significantly to the stock price decline [1] - The strong upward trend in Mercadolibre's stock typically leads to natural price corrections as investors reevaluate the company's value [1] - Broader economic data, industry trends, and global events continue to impact stock price volatility [1] Investor Considerations - Investors are advised to remain calm in the face of short-term market instability caused by the recent share sale [1] - The stock price correction may not indicate a deterioration in the company's fundamentals but rather a reassessment of its intrinsic value [1] - Monitoring the company's financial reports and industry dynamics is essential for identifying potential positive factors [1]

Core Insights - MercadoLibre is experiencing a 10% decline in stock value due to increased competition from Amazon in Brazil, its largest market [1][2] - Amazon's aggressive strategy includes waiving logistics fees and take rates for new Brazilian merchants during the holiday season [2] - Despite the competition, MercadoLibre's strong logistical network and diverse fintech solutions position it well in the market [4][5] Competitive Landscape - Amazon is expanding aggressively in Brazil, but it is still considered an underdog compared to its dominance in the U.S. [3] - MercadoLibre has a robust ecosystem that includes e-commerce and fintech, making it difficult for competitors to disrupt its business [4][5] - Other competitors like Walmart, Costco, Sea Limited's Shopee, and Chinese companies such as Shein and PDD Holding's Temu are also entering the Latin American market [6][7] Market Potential - Latin America is viewed as a promising growth area for e-commerce, indicating that competition will continue to intensify [5] - MercadoLibre has shown significant growth over the past decade, being described as a "24-bagger," highlighting its potential for future growth [5]

Core Points - Mercadolibre's stock price increased by 3.20% on October 2, despite hitting a new low since April 2025 earlier in the day [1] - eBay announced the sale of a significant portion of its Mercadolibre shares, totaling 5.5 million shares, which is expected to raise over $1 billion, adding supply pressure to the market and contributing to the stock's decline [1] - Despite recent volatility, Mercadolibre's stock has risen by 39.96% since the beginning of the year, prompting investors to reassess the stock's value [1] Company Performance - The recent stock fluctuations are influenced by economic data, industry trends, and global events, which continue to play a role in stock price volatility [1] - The large-scale share sale by eBay has introduced short-term instability but may create new opportunities for investors in the long run [2] - The stock price correction does not necessarily indicate a deterioration in the company's fundamentals but may reflect a market reassessment of its intrinsic value [2] Investment Strategy - Investors are advised to monitor the company's financial reports and industry dynamics to capture potential positive factors [2] - Risk management remains crucial in the face of ongoing economic data changes and global events, as uncertainty in stock price fluctuations persists [2] - Maintaining sensitivity to market information and adjusting investment portfolios flexibly may be effective strategies for navigating the complex market environment [2]

I recently joined The REIT Forum , and if you are looking for more investment ideas like this one, get them exclusively at The REIT Forum with access to our subscriber-only portfolios.I first wrote about MercadoLibre (NASDAQ: MELI ) in early June. At that time, I rated the stock a “hold,” as I believed that its price-to-earnings multiple of 50 was unjustified, especially as beating its earningsAmrita runs a boutique family office fund in beautiful Vancouver, where she leads the investment strategy for the f ...

Group 1 - The article discusses the investment strategy of a family office fund led by Amrita, focusing on sustainable, growth-driven companies that aim to maximize shareholder equity [1] - Amrita has a background in high-growth supply-chain start-ups and has experience working with venture capital firms, which has contributed to her investment acumen [1] - The newsletter "The Pragmatic Optimist," co-founded by Amrita, emphasizes democratizing financial literacy and simplifying complex macroeconomic concepts for better understanding [1] Group 2 - The article mentions that MercadoLibre (NASDAQ: MELI) was previously rated a "hold" due to an unjustified price-to-earnings multiple of 50 [1]

Core Insights - MercadoLibre is a promising investment due to its growth optionality, allowing it to expand into new markets despite its current size of $120 billion and a 30% increase in 2025 [1][2] Market Expansion - The company has 71 million monthly active buyers who spent over $15 billion in the last quarter, with Brazil, Argentina, and Mexico making up 96% of total sales, indicating significant growth potential in other Latin American countries [3] - Latin America has 50% more people than the United States, yet its e-commerce penetration is only half that of the U.S., highlighting a vast opportunity for growth [4] Advertising Growth - MercadoLibre increased its share of the Latin American digital ads market from 1.5% in 2019 to 6.7% in 2024, making it the third-largest advertiser in the region, with a 38% sales growth in the second quarter [5] - The Latin American retail media market is expected to triple in size between 2024 and 2028, suggesting continued growth for MercadoLibre in this segment [5] Business-to-Business (B2B) Initiatives - The company launched its B2B offering, enabling 4 million users to make wholesale purchases, with management estimating this market to be four times the size of its existing consumer marketplace [6] Fintech and Credit Services - With 68 million monthly active fintech users, MercadoLibre is positioned to disrupt the underbanked and cash-heavy payment landscape in Latin America [7] - The company has 35 million users in its credit portfolio, with 60% previously having no credit offers, and continues to grow sales by over 30% quarter after quarter [7]

Group 1 - Mercado Libre's shares experienced a significant decline of 6.8% on October 1, following a 6.6% drop on September 30, marking the largest two-day slump since November [2] - The decline is attributed to increased competition in Brazil's eCommerce market, particularly due to Amazon Brazil's decision to waive or reduce Fulfillment by Amazon fees for certain sellers during the holiday season, as well as the presence of ultra-cheap goods from Temu and Shein [2][3] - Despite the recent stock decline, Mercado Libre remains the largest eCommerce player in Brazil and Latin America, continuing to invest heavily in the region, including an expansion of its free shipping offer [3][5] Group 2 - The company reported a 34% year-over-year growth in items sold in June, driven by a lower threshold for free shipping [4] - Mercado Libre plans to increase its investment in Brazil by 48%, from approximately $3.7 billion in 2024 to about $5.8 billion in 2025, focusing on logistics, technology, marketing, and increasing its workforce by 14,000 to a total of 50,000 [6] - Additionally, the company announced a $3.4 billion investment in Mexico, its second-largest market, while not disclosing specific plans for Argentina [7] Group 3 - On September 22, Mercado Libre launched a new B2B unit in Argentina, Brazil, Chile, and Mexico, expanding its business beyond the traditional consumer market, with over 4 million users enabled for wholesale purchases [8]

Economic Indicators - US MBA mortgage applications fell by -12.7% in the week ended September 26, with the purchase mortgage sub-index down -1.0% and the refinancing sub-index down -20.6% [1] - The September ISM manufacturing index rose +0.4 to a 7-month high of 49.1, exceeding expectations of 49.0 [6] - The September ADP employment change unexpectedly fell by -32,000, marking the largest decline in 2.5 years, while August was revised lower to -3,000 from +54,000 [5] Market Reactions - Stocks initially moved lower due to the US government shutdown, but later recovered, with the S&P 500 and Nasdaq 100 reaching new all-time highs [2][4] - The dollar index fell to a one-week low, while gold prices climbed to a record high amid risk-off sentiment [2] - Rising corporate earnings expectations are a bullish backdrop for stocks, with over 22% of S&P 500 companies providing guidance for Q3 earnings that are expected to beat analysts' expectations [8] Sector Performance - Pharmaceutical stocks rallied, with AstraZeneca closing up more than +9% and Eli Lilly up more than +8%, driven by hopes from Pfizer's deal with the US government [15] - Chipmakers and AI-infrastructure stocks also saw gains, with Super Micro Computer closing up more than +9% and Micron Technology up more than +8% [16] - Grocery retailers declined after Amazon announced a new private-label food brand, leading to Dollar Tree and Dollar General closing down more than -4% and -3% respectively [22] Upcoming Economic Data - Weekly initial unemployment claims are expected to increase by +7,000 to 225,000, and August factory orders are expected to rise by +1.4% month-over-month [9] - September nonfarm payrolls are anticipated to increase by +51,000, with the unemployment rate expected to remain unchanged at 4.3% [9]

MELI is the most valuable company in LatAm despite also being one of the youngest listed entities in the region, only turning 26 this year.Striving to compound knowledge. Long-time fan of Warren and Charlie. Always invert. "To finish first, you must first finish". Investing own and family funds for +20 years. Senior finance roles at public and private corporations for most of that time.Analyst’s Disclosure:I/we have a beneficial long position in the shares of MELI either through stock ownership, options, or ...