Core Viewpoint - Investing in U.S. stocks faces near-term uncertainty due to fluctuating tariff levels, making international stocks, such as MercadoLibre, more appealing as they are not affected by U.S. tariffs [1][2] Company Overview - MercadoLibre operates in e-commerce, fintech, and logistics within Latin America, allowing it to remain unaffected by U.S. economic conditions and tariffs [3][4] - The company has established itself as the leading e-commerce platform in Latin America since its inception in 1999, providing a competitive edge over newer entrants like Amazon [5] Business Performance - In 2024, MercadoLibre generated nearly $21 billion in revenue, marking a 38% increase year-over-year, with gross merchandise volumes rising by 15% [8] - The fintech segment, Mercado Pago, reported a total payment volume of $197 billion in 2024, up from $147 billion the previous year, indicating significant growth in this area [8] Financial Metrics - Despite a 49% increase in the cost of revenue, the company managed to grow its net income to $1.9 billion in 2024, a 94% increase from 2023, aided by reduced foreign currency losses and income taxes [9] - The company's P/E ratio stands at 55, reflecting a growth phase similar to Amazon's in the 2000s, while its market cap of $105 billion is significantly smaller than Amazon's $1.9 trillion, suggesting potential for faster revenue growth [10] Strategic Positioning - MercadoLibre's minimal exposure to U.S. tariffs positions it as a potential shelter for investors looking to avoid the impacts of U.S. trade policies [12] - The company continues to thrive by addressing regional needs in Latin America, which may mitigate concerns over slowing revenue growth in the near term [13]

Industry Overview - Mobile payments are financial transactions conducted via smartphones, tablets, or wearable devices, eliminating the need for cash or physical cards [1] - The global mobile payments market was valued at $88.5 billion in 2024 and is projected to grow at a compound annual growth rate (CAGR) of 38% from 2025 to 2030, driven by smartphone penetration and e-commerce growth [4] Technological Advancements - Technologies such as blockchain and artificial intelligence are enhancing transaction transparency, automating processes, and improving fraud prevention in mobile payments [2] - Digital wallets and contactless technologies, including NFC, are facilitating seamless transactions and peer-to-peer transfers [1][2] Key Players - Affirm Holdings, Inc. is known for its "Buy Now, Pay Later" solutions, allowing consumers to split purchases into biweekly or monthly payments, with 21 million active consumers and 337,000 active merchants as of December 31, 2024 [6][7] - Fiserv, Inc. offers a comprehensive suite of mobile payment solutions, including Clover Go, which supports around 3.5 million POS devices globally and has been adopted by over 2,100 financial institutions [9][10] - MercadoLibre, Inc. operates Mercado Pago, which processed approximately 11.3 billion transactions last year and has over 56 million monthly active users, highlighting its significant growth potential in Latin America [13][14] - Paymentus Holdings, Inc. provides an all-in-one electronic bill presentment and payment platform, processing 166 million transactions in the fourth quarter of 2024, showcasing its operational scale [16][18] Market Trends - The COVID-19 pandemic has accelerated the demand for contactless and secure payment solutions, further driving the adoption of mobile payments [3] - Companies are leveraging strategic partnerships to enhance their service offerings and expand into new markets, such as Affirm's collaboration with Shopify for international expansion [8]

Group 1: ASML - ASML is the only company globally capable of producing extreme ultraviolet lithography machines essential for semiconductor manufacturing [2][4] - The demand for ASML's machines is expected to increase as chip production ramps up due to AI expansion, and there is a possibility of tariff exemptions for these machines [3][4] - ASML's stock has declined approximately 40% from its all-time high, currently trading at around 25 times forward earnings and 31 times trailing earnings, representing a low price point [5][7] Group 2: MercadoLibre - MercadoLibre operates in the Latin American region as an e-commerce and fintech provider, with no direct business in the U.S., making it less affected by U.S. tariffs [8][12] - The company has demonstrated strong and steady growth, with profit margins trending higher, and is projected to achieve 24% revenue growth in 2025 and 23% in 2026 [10][12] - Despite a recent decline of about 15% from its all-time high, MercadoLibre presents a buying opportunity as the Latin American e-commerce and fintech market continues to expand [12][13]

Core Viewpoint - MercadoLibre is positioned as a strong growth opportunity in the e-commerce sector of Latin America, with significant potential for future gains despite recent market volatility [1][2]. Group 1: Growth Potential - MercadoLibre has experienced substantial growth, with a revenue compound annual growth rate (CAGR) of 55% from 2019 to 2024, and the number of annual unique buyers increasing from 44 million to 100 million during the same period [4]. - The company has established a strong foothold in 19 Latin American countries, primarily serving customers in Argentina, Brazil, and Mexico [3]. - Analysts project a revenue CAGR of 22% from 2024 to 2027, indicating continued growth potential as internet penetration and income levels rise in the region [6]. Group 2: Profitability - MercadoLibre achieved consistent profitability on a GAAP basis in 2021, with net income growing at a CAGR of 184% in USD terms over the subsequent three years [7]. - The company's profits are driven by a shift towards more profitable products, expansion of higher-margin services, and operational efficiencies that reduce costs [8]. - Analysts expect net income to continue rising at a CAGR of 31% from 2024 to 2027, reflecting ongoing profitability improvements [7]. Group 3: Valuation - As of the latest data, MercadoLibre trades at $1,826 per share, valued at 38 times this year's earnings and 27 times next year's earnings, which is relatively reasonable compared to Amazon's valuation [9]. - The stock's valuation may be impacted by inflationary pressures and political uncertainties in its core markets, which could compress near-term valuations [10]. Group 4: Future Outlook - If MercadoLibre meets analysts' expectations and achieves a robust earnings per share CAGR of 20% through 2027, the stock could potentially double to approximately $3,646 per share by early 2030 [11]. - The company is viewed as a strong investment opportunity for patient investors willing to navigate market volatility and uncertainties [12].

Company Overview - MercadoLibre is a leading e-commerce and fintech company operating in 18 Latin American countries, with a significant focus on expanding its financial services platform [3][4] - The company has a strong brand presence and is recognized as a market leader in the region, benefiting from a first-mover advantage [7] Financial Performance - In Q4 2024, MercadoLibre reported a 96% year-over-year increase in revenue (currency neutral), with gross merchandise volume up 56% and unique buyers exceeding 100 million for the first time [4] - The fintech segment saw total payment volume increase by 49%, with a credit portfolio growth of 74% to $6.6 billion and assets under management rising 129% to $10.6 billion [4][5] - Operating income rose from $335 million to $820 million year over year, with the operating margin expanding from 13.5% to 14.1% [5] Market Opportunities - E-commerce penetration in Latin America is approximately 14.4%, significantly lower than the U.S. (28.8%) and China (38.1%), indicating substantial growth potential [6] - The Latin American fintech market is underdeveloped, with less than half of Mexico's population having a bank account, presenting a ripe opportunity for MercadoLibre to expand its services [8] - The overall market for e-commerce in the region is projected to grow from $151 billion in 2023 to $232 billion by 2028, further enhancing MercadoLibre's growth prospects [7] Stock Performance - MercadoLibre's stock has increased by 7% year to date, contrasting with a 15% decline in the S&P 500, indicating strong investor confidence [10] - The stock trades at a forward one-year P/E ratio of 28, which is considered attractive given the company's growth potential [11]

Core Perspective - MercadoLibre (MELI) and eBay (EBAY) represent two distinct approaches in the online marketplace sector, with MELI focusing on high-growth Latin American markets and eBay operating as a mature global player [1][2] Summary of MELI - MELI has developed a seller-focused ecosystem tailored to the needs of Latin American businesses, featuring tools like MyPage for storefront customization and a dynamic pricing tool for competitive positioning [3] - The company reported $7.92 billion in operating cash flow for 2024, a 54.05% year-over-year increase, driven by a net income of $1.91 billion and revenues of $20.77 billion, reflecting operational efficiency and long-term profitability [4] - As of December 31, 2024, MELI's balance sheet showed $2.63 billion in cash and cash equivalents, providing flexibility for strategic initiatives [5] - The Zacks Consensus Estimate for MELI's 2025 earnings is $47.50 per share, indicating a 26.03% year-over-year growth, with revenues expected to reach $25.89 billion, a 24.59% increase [6] Summary of EBAY - eBay is leveraging generative AI technology to enhance seller tools, but has faced challenges in new customer acquisition, with active buyers declining by 2% in 2023 and only increasing by 1% in 2024 [8][9] - The company generated $2.41 billion in operating cash flow for 2024, a 0.49% year-over-year decline, despite an 8% increase in non-GAAP net income to $2.45 billion and a 2% rise in revenues to $10.3 billion [10] - For 2025, eBay's earnings consensus is $5.30 per share, suggesting an 8.61% growth from 2024, while revenues are expected to decline by 0.29% [11] Stock Performance and Valuation - In the past 12 months, MELI shares have appreciated by 31.4%, outperforming eBay's 19.4% increase and the Zacks Internet-Commerce industry's decline of 10.1% [13] - MELI trades at a forward Price/Sales ratio of 3.64, higher than the industry average of 2.01, while eBay's ratio is 2.72, indicating a valuation premium for MELI due to its growth trajectory [15] - eBay's disconnect between earnings growth and declining cash flow raises concerns about its operational efficiency and future earnings potential [18] Investment Outlook - MELI is positioned as a better investment opportunity due to its rapid user base expansion and consistent profitability, with plans to increase investments in Mexico by 38% and Brazil by 48% in 2025 [19] - MELI's superior execution and market penetration in Latin America support its status as the preferred investment choice, with a Zacks Rank of 2 (Buy) compared to eBay's 3 (Hold) [20]

Investment Plans - MercadoLibre plans to increase its investment in Brazil by 48%, from 23 billion reais (approximately $3.7 billion) in 2024 to 34 billion reais (approximately $5.8 billion) in 2025, focusing on logistics, technology, marketing, and increasing its staff by 14,000 to a total of 50,000 [1] - The company also announced a $3.4 billion investment in Mexico, its second largest market after Brazil [2] Market Performance - MercadoLibre reported double-digit growth year over year in unique active buyers and items sold, with unique buyers increasing by 24% to 67.3 million and items sold rising by 27% to 525.5 million [3] Strategic Goals - The Chief Financial Officer emphasized the importance of a solid credit card offering to the company's ambition of becoming the largest digital bank in Latin America, indicating continued investment in the platform despite potential short-term margin pressures [4] - MercadoLibre aims to leverage data from its extensive customer base to offer financial products such as loans and insurance, positioning itself as a dominant force in digital banking in the region [4] Digital Engagement in Brazil - Brazil has been identified as a global leader in digital engagement, with the highest number of activity days among consumers in core digital activities such as banking, shopping, and entertainment [5]

Core Viewpoint - MercadoLibre, Inc. (MELI) is experiencing a downtrend, having broken support at the $1,945 level, indicating a potential for further decline [1][4][5]. Group 1: Stock Performance - The stock has been in a downtrend and is likely to continue moving lower after breaking the $1,945 support level [1]. - The $1,945 level was previously a significant support point, indicating strong buy interest [2]. - The recent break of this support suggests that the demand from buyers has diminished, setting the stage for a potential decline [5]. Group 2: Future Support Levels - If the stock continues to trend lower, the next support level is anticipated to be around $1,800, which was a support level in January [6]. - Traders who previously sold at the $1,945 support may look to buy back at the $1,800 level, potentially creating new support if enough buy orders are placed [7].

Core Viewpoint - The article discusses the reliability of brokerage recommendations, particularly focusing on MercadoLibre (MELI), and emphasizes the importance of using these recommendations in conjunction with other analytical tools for making investment decisions [1][4]. Brokerage Recommendations - MercadoLibre has an average brokerage recommendation (ABR) of 1.21, indicating a consensus between Strong Buy and Buy, based on recommendations from 17 brokerage firms [2]. - Out of the 17 recommendations, 15 are classified as Strong Buy, which constitutes 88.2% of the total recommendations [2]. Limitations of Brokerage Recommendations - The article highlights that relying solely on brokerage recommendations may not be wise, as studies show limited success in guiding investors towards stocks with the best price increase potential [4]. - Brokerage firms often exhibit a positive bias in their ratings due to vested interests, leading to a disproportionate number of Strong Buy recommendations compared to Strong Sell [5][9]. Comparison with Zacks Rank - The Zacks Rank, which is based on earnings estimate revisions, is presented as a more reliable indicator of near-term stock price performance compared to ABR [7][10]. - The Zacks Rank is timely and reflects the latest earnings estimates, while ABR may not always be up-to-date [11]. Earnings Estimates for MercadoLibre - The Zacks Consensus Estimate for MercadoLibre's current year earnings has increased by 1.1% over the past month to $47.50, indicating growing optimism among analysts [12]. - The recent change in consensus estimates, along with other factors, has resulted in a Zacks Rank 2 (Buy) for MercadoLibre, suggesting a positive outlook for the stock [13].

Group 1 - The core growth of MercadoLibre is driven by the expansion of its marketplace and the consolidation of its fintech ecosystem, particularly through Mercado Pago, which has evolved from a payments platform [1] Group 2 - Mercado Pago plays a significant role in the company's overall strategy, indicating a strong integration of financial technology within its business model [1]