This Latin American E-Commerce Stock Could Be Worth $500 Billion in 10 Years

Core Viewpoint - The U.S. stock market is currently trading at a premium P/E ratio compared to global markets, making some overseas stocks, like MercadoLibre, attractive investment opportunities due to their potential for growth [2][3]. Company Overview - MercadoLibre operates as a leading e-commerce platform and financial services provider in Latin America, with a current market cap of $100 billion and a significant presence in countries such as Mexico, Brazil, and Argentina [3][4]. - The company has a history of impressive revenue growth, with total revenue increasing by 49% in constant currency last quarter and nearly 4,000% cumulatively over the past decade [5][6]. Financial Performance - The company has layered financial services through its Mercado Pago subsidiary, which boasts 72 million monthly active users and achieved a 65% year-over-year revenue growth last quarter [5]. - MercadoLibre's trailing earnings before interest and taxes are just over $3 billion, leading to a trailing earnings multiple between 30 and 35 based on its current market cap [9]. Market Potential - E-commerce penetration in Latin America remains low compared to other regions, presenting significant growth opportunities as internet adoption and economic conditions improve [6][7]. - The economic recovery in Argentina, one of MercadoLibre's largest markets, could further enhance growth prospects if ongoing reforms continue to yield positive results [7]. Future Projections - If MercadoLibre achieves $100 billion in revenue with a 20% profit margin in ten years, it could generate $20 billion in earnings, justifying a market cap of $500 billion based on a forward earnings multiple of 25 [11].