MercadoLibre Shares Sink. Is the Stock a Buy as Revenue Growth Remains Robust?

Core Insights - MercadoLibre's shares fell despite strong revenue growth due to margin pressure, with a 20% decline in stock value over the past year [1] Financial Performance - In Q4, MercadoLibre's revenue increased by 45% to $8.76 billion, surpassing the $8.49 billion consensus, but EPS fell 13% to $11.03, missing the $11.44 consensus due to operating margin compression [2] - The gross margin stood at 44.5% [2] Fintech Growth - The fintech segment saw monthly active users rise by 30% for the 10th consecutive quarter, with the credit card portfolio doubling year-over-year to $12.5 billion [3] - Non-performing loans in the credit card portfolio decreased to an all-time low of 4.4%, while assets under management increased by 78% to $190 billion [3] - Total payment volumes through Mercado Pago grew by 42% to $83.7 billion [3] E-commerce Performance - Gross merchandise volume (GMV) rose by 37% to $19.9 billion, with unique active buyers increasing by 24% to 83 million [4] - Brazil's GMV saw a 35% currency-neutral increase, while Mexico's GMV also rose by 35%, and Argentina's GMV surged by 42% [4] Advertising Revenue - Advertising revenue surged by 67%, attributed to the use of artificial intelligence for campaign automation and improved bidding algorithms [5] Investment Outlook - Despite current market conditions not favoring investment in growth-focused companies, MercadoLibre's rapid revenue growth and strong free cash flow position it well for long-term success [7] - The stock is considered attractively valued with a forward P/E ratio of 20.5 and a PEG ratio below 0.5, indicating potential for investment on the dip [8]