What to Know Before Buying MercadoLibre Stock

Core Insights - MercadoLibre has consistently outperformed the market, particularly in Latin America, where it operates an e-commerce platform similar to Amazon [1] Group 1: Company Overview - MercadoLibre operates an e-commerce marketplace headquartered in Uruguay, serving 18 Latin American countries, with a membership program called Meli+ and a logistics network for quick deliveries [2] - The company has developed a digital payments app, MercadoPago, which has expanded into a significant fintech business, offering digital banking, credit cards, and other financial services [3] Group 2: Performance Metrics - Revenue increased by 49% year over year in the third quarter, with gross merchandise volume (GMV) up 35% and total payment volume (TPV) up 54% [4] - Unique active buyers rose by 26% to 76.8 million, and items sold increased by 39% in Q3, with items sold per unique buyer up by 11% [5] - Operating income grew from $557 million to $724 million in the quarter, generating $206 million in adjusted free cash flow [6] Group 3: Growth Opportunities - Latin America is underpenetrated in e-commerce, with only about 15% of retail occurring online, presenting significant long-term growth opportunities [7] - The fintech sector also shows potential due to a large underbanked population needing digital options, with MercadoLibre expanding its market by launching new products [8] Group 4: Valuation - MercadoLibre stock trades at 16 times trailing 12-month free cash flow, indicating it could be a valuable addition to a growth-centered portfolio [9]