This E-Commerce Stock Could Be the Best Investment of the Decade

Core Viewpoint - MercadoLibre has significant growth potential compared to its e-commerce and fintech peers, driven by its established market position in Latin America and the ongoing expansion of the region's digital economy [1][2]. Company Growth - Founded in 1999, MercadoLibre has established a first mover's advantage in Latin America's fragmented e-commerce market by developing reliable logistics networks [3]. - The company operates in 18 countries, with the majority of its revenue generated from Brazil, Mexico, and Argentina [3]. - From 2013 to 2023, MercadoLibre's gross merchandise volume (GMV) grew at a compound annual growth rate (CAGR) of 20%, total payment volume (TPV) at a CAGR of 54%, and total revenue at a CAGR of 41% in USD terms [5]. Fintech Ecosystem - MercadoLibre has integrated its Mercado Pago digital payments platform into its business model, creating a fintech ecosystem that includes credit card services, lending, and cryptocurrency trading [4]. - The platform's stickiness has strengthened the company's competitive position against regional and international rivals [4]. Market Potential - The Latin American e-commerce market is projected to grow at a CAGR of 14.6% from 2024 to 2030, driven by increasing internet penetration and a shift from physical retail [6]. - Approximately 70% of Latin America's population remains unbanked, presenting a substantial opportunity for digital banking services, with the neobanking market expected to grow at a CAGR of 54.8% from 2023 to 2030 [7]. Financial Performance - MercadoLibre achieved profitability in 2021, with net income growing at a CAGR of 244% over the subsequent two years due to improved margins from economies of scale [8]. - Analysts forecast revenue and net income growth at CAGRs of 29% and 48%, respectively, from 2023 to 2026 [10]. Future Projections - If MercadoLibre continues to grow its earnings per share (EPS) at a CAGR of 25% over the next eight years, its stock price could potentially rise from approximately $1,900 to$15,200 [11]. - This growth could increase the company's market capitalization from $96 billion to about$768 billion, although it would still be smaller than Amazon's current valuation of $2.4 trillion [12]. Active User Base - As of the first nine months of 2024, MercadoLibre served 87 million active buyers and 56 million fintech monthly active users, indicating substantial room for growth within Latin America's population of over 660 million [9].