Core Viewpoint - MercadoLibre (MELI) presents a concerning investment picture, with significant financial health issues despite reporting a 39.5% year-over-year revenue growth to $7.41 billion in the last quarter, suggesting potential investors should be cautious about this stock in 2026 [1]. Financial Performance - The Zacks Consensus Estimate for 2026 earnings has been revised downward by 1.54% over the past 30 days to $59.59 per share, indicating market pessimism regarding MELI's growth trajectory [2]. - MELI's revenue growth masks underlying profitability issues, with aggressive fintech expansion leading to compressed margins and increased credit losses [7][8]. Economic Environment - MELI's extensive exposure to Latin America subjects it to significant macroeconomic headwinds, including Argentina's inflation rate of 31.40% and a downward revision of Mexico's GDP growth projections to 1.5% for 2026, which could pressure e-commerce transaction volumes [4][5]. - Brazil's elevated interest rates to combat inflation are increasing funding costs for MELI's $11.02 billion credit portfolio, further compressing net interest margins and reducing consumer disposable income [5]. Profitability Challenges - The net interest margin after losses has compressed by 320 basis points to 21% in Q3 2025, highlighting difficulties in scaling consumer lending in volatile markets [9]. - Despite a projected total payment volume of $275.8 billion for 2025, the fintech operations are absorbing capital while delivering weaker profitability, with income from operations margin falling to 9.8% and net income margin declining to 5.7% [8][9]. Market Performance - MELI shares have declined by 11.7% in the past six months, underperforming both the Zacks Internet-Commerce industry and the Zacks Retail-Wholesale sector, which increased by 5.7% and 4.1% respectively [10]. - The stock's performance gap compared to peers like Nu Holdings and Amazon indicates critical execution weaknesses, as aggressive top-line growth fails to create shareholder value [10]. Valuation Concerns - MELI trades at a price-to-earnings ratio of 36.35X, significantly above the industry average of 24.26X and the broader sector average of 24.66X, making its valuation difficult to justify given ongoing margin compression [13]. - Without a clear pathway to margin expansion and sustainable profitability, the current premium valuation offers minimal safety for prospective investors [13]. Conclusion - The combination of regional economic instability, aggressive fintech expansion eroding profitability, and significant underperformance relative to peers makes MELI an unattractive investment proposition [16].

They are going through rough patches, but their long-term prospects remain attractive.While many wonder what 2026 has in store, it's important for long-term investors not to lose sight of the big picture.Whatever happens -- recession, macroeconomic concerns, a market crash -- the formula to earn exceptional returns over the long run will remain the same. It comes down to buying shares of companies with strong businesses, capability for excellent moats, and attractive growth prospects. These companies can na ...

Market Analysis by covering: MercadoLibre Inc, Sea Ltd, Uber Technologies Inc, Coupang LLC. Read 's Market Analysis on Investing.com ...

Core Insights - The global ecommerce market is projected to grow at a compound annual growth rate (CAGR) of 6.2%, reaching approximately US$9.21 trillion by 2029, up from an estimated US$7.25 trillion in 2025 [3][13]. Market Growth and Trends - The ecommerce market has experienced a robust growth rate of 9.5% from 2020 to 2024, with expectations of continued growth at a CAGR of 6.2% from 2025 to 2029 [3]. - Digital payments are becoming more localized, with countries like India and Brazil seeing rapid adoption of local payment methods integrated into ecommerce platforms [4]. - Social commerce is reshaping online purchasing pathways, with platforms like Douyin and TikTok Shop driving engagement and sales through content [5][9]. Competitive Landscape - Competitive intensity is expected to increase as cross-border discount platforms scale globally and social-commerce ecosystems deepen their integration with traditional commerce [2]. - Major players such as Amazon, Alibaba, Walmart, JD.com, and Mercado Libre are scaling logistics networks and financial services as key differentiators [11]. - New entrants like Temu are expanding their presence in the U.S. and Europe, intensifying competition in the ecommerce space [11]. Cross-Border Commerce - Cross-border ecommerce is gaining momentum as consumers seek imports and price advantages, with platforms like Temu and Shein attracting customers through competitively priced international goods [6][9]. - Improved international logistics and favorable government trade policies are facilitating cross-border flows, although regulatory scrutiny may impact certain models [9][10]. Omni-Channel Integration - Retailers are increasingly integrating ecommerce with physical store formats to enhance fulfillment and inventory management, leveraging existing store networks for improved last-mile efficiency [7][10]. - The trend towards omni-channel retail integration is expected to strengthen as retailers seek margin stability and adapt to consumer expectations for flexible delivery options [7][10]. Recent Developments - Strategic partnerships and mergers have been prominent, such as Shopify and TikTok's collaboration for cross-border merchant onboarding and Amazon's investment in Deliveroo for grocery fulfillment [12].

Core Viewpoint - MercadoLibre is at a critical juncture as it enters 2026, needing to demonstrate that its growth can be both durable and profitable after a decade of rapid expansion [1][3] Group 1: Growth and Profitability - The company continues to grow, with its e-commerce platform attracting new buyers and transactions, while Mercado Pago has emerged as a significant fintech platform in Latin America [2] - In 2025, margins faced pressure due to increased competition and rising capital requirements, indicating that the growth story is no longer solely driven by favorable market conditions [2][4] - Investors will be looking for evidence in 2026 that margins can stabilize without sacrificing growth, requiring improvements in logistics efficiency and monetization strategies [5][6] Group 2: Fintech Performance - Mercado Pago has become a crucial growth engine, with rapid expansion in payments, assets under management, and lending, alongside improved credit quality [8][9] - The company must maintain credit discipline and control delinquency rates to ensure that fintech growth is sustainable and contributes meaningfully to earnings [10] Group 3: Investment and Operating Leverage - Significant investments are being made in logistics, technology, and payment infrastructure across key markets, which are strategically important for enhancing delivery and reliability [11] - In 2026, investors will seek signs of operating leverage, such as declining fulfillment costs and efficient scaling of technology spend [12] Group 4: Competitive Landscape - Competition has intensified, with Shopee surpassing MercadoLibre in Brazil and new entrants like Temu altering consumer price expectations [13] - The company must demonstrate that competition will not lead to permanent margin compression, with signs of pricing rationality and improved monetization per user being critical for restoring confidence [14] Group 5: Investor Implications - MercadoLibre remains a compelling long-term investment opportunity in Latin America's digital economy, but the company must prove its ability to execute effectively in 2026 [16][17] - Success in 2026 could transition the company from a high-growth platform to a durable compounder, while failure may lead to increased stock volatility despite rising revenues [16]

Key Takeaways MELI's credit book remains early in seasoning, raising default volatility as portfolios mature into 2026.Macro strain adds risk: Argentina inflation hit 31.4%, and Mexico's 2026 GDP outlook was cut to 1.5%.MELI's funding costs rose in Argentina as election-driven volatility weighed on risk-adjusted returns.MercadoLibre (MELI) enters 2026 with a credit profile that is materially exposed to borrower stress, funding cost swings and macro volatility, as lending expansion becomes the dominant drive ...

As investors broaden their horizons beyond U.S. borders, international markets have rewarded the shift with sustained outperformance. In 2025, the iShares MSCI ACWI ex-U.S. ETF's 30% return more than ... ...

Core Viewpoint - The article identifies three stocks that have the potential to double in value in 2026, highlighting their growth prospects and market positioning. Group 1: Nebius - Nebius was spun out of Yandex and focuses on cloud computing, similar to Google Cloud [3][4] - The company is expanding its data center footprint and renting out computing capacity, primarily using Nvidia GPUs for AI workloads [4] - Nebius expects an annual run rate of $7 billion to $9 billion in revenue for 2026, up from a current ARR of $551 million, indicating significant growth potential [6][7] Group 2: The Trade Desk - The Trade Desk operates a buy-side ad platform and experienced its slowest growth quarter in Q3, but the industry is still growing, particularly with connected TV [8][10] - The stock trades at an attractive valuation of 18 times forward earnings, which could lead to a doubling of the stock price if growth resumes [11] - The absence of political spending headwinds in 2026 may facilitate a return to growth for The Trade Desk [10] Group 3: MercadoLibre - MercadoLibre is the leading e-commerce platform in Latin America and has developed a fintech division to enhance payment access [12][13] - The company is projected to achieve 29% revenue growth in 2026, with potential for even higher growth based on historical performance [15] - Despite a 20% decline from its all-time high, MercadoLibre's strong growth trajectory suggests a high chance of doubling in 2026 [15][16]

Core Viewpoint - MercadoLibre Inc. (NASDAQ:MELI) has shown mixed short-term performance with a 5.86% decline over the past month, but a 9.82% increase over the past year, prompting long-term shareholders to consider the company's price-to-earnings (P/E) ratio [1] Group 1: P/E Ratio Analysis - The P/E ratio is a critical metric for evaluating a company's current share price relative to its earnings per share (EPS), helping long-term investors assess performance against historical data and industry benchmarks [3] - A higher P/E ratio suggests that investors expect better future performance, which may indicate overvaluation, but it can also reflect optimism about future growth and rising dividends [3] - MercadoLibre's P/E ratio stands at 49.33, which is significantly lower than the Broadline Retail industry's aggregate P/E ratio of 90.82, potentially indicating that the stock is undervalued or may perform worse than its peers [4] Group 2: Limitations of P/E Ratio - While a lower P/E ratio can suggest undervaluation, it may also imply that shareholders do not anticipate future growth, highlighting the need for a comprehensive analysis [6] - The P/E ratio should not be used in isolation; other financial metrics and qualitative factors, such as industry trends and business cycles, are essential for informed investment decisions [7]

Core Insights - MercadoLibre is recognized as a leading e-commerce and fintech platform in Latin America, often compared to Amazon, with significant growth potential [1][2] Group 1: Growth Performance - In Q3 2025, MercadoLibre's net revenue increased by 39% year over year, reaching $7.4 billion, driven by nearly 35% growth in gross merchandise value (GMV) on a foreign-exchange-neutral basis [4] - The platform serves 77 million unique buyers quarterly, marking a 26% increase from the previous year [4] - Mercado Pago's credit portfolio grew by 83% year over year to $11.0 billion, with a 90-day non-performing loan (NPL) rate improving from 7.8% to 6.8% [5] - Monthly active users of Mercado Pago reached 72 million, with increased usage for everyday payments, savings, and credit [5] - The integration of marketplace, logistics, and payments enhances user engagement and raises switching costs for buyers and sellers [6] Group 2: Profitability Challenges - MercadoLibre's operating margin peaked at 13.5% in Q4 2024 but declined to 9.8% in Q3 2025 [7] - The decline in margins is primarily attributed to increased shipping costs, as the company reduced its free-shipping threshold from 79 reais to 19 reais to boost volumes amid rising competition [8] - Sustained elevated shipping subsidies may be necessary to maintain market position as competitors aggressively compete on price and delivery speed [10]