Key Takeaways MELI's rapid credit expansion is deepening user engagement but introducing new margin and risk pressures.Credit cards are taking a larger share as funding costs climb and asset quality stays broadly stable.Competition from SE and NU is intensifying, adding pressure on MELI's credit pricing and lending margins.MercadoLibre’s (MELI) lending arm has become a powerful driver of engagement inside Mercado Pago and its rapid expansion is shaping the company’s operating profile. The credit portfolio i ...

Key Takeaways JD.com's active users in the third quarter of 2025 jumped over 40% as net revenues rose 14.9% to RMB 299.1B.Rising shopping frequency and ecosystem tools like JD Food Delivery are boosting engagement.AI search, personalisation and offline expansion support stronger conversion as activity builds.JD.com (JD) operates a vertically integrated e-commerce model built on direct procurement, proprietary logistics and strict quality control. This structure offers greater control over inventory and fulf ...

Key Takeaways MercadoLibre shares fell 15.6% in six months amid margin pressure and rising investor caution.MELI's shipping cuts and fintech expansion drove strong volume gains but pushed margins lower.MercadoLibre faces intense competition from major platforms, limiting upside for its premium valuation. MercadoLibre (MELI) shares have declined 15.6% over the past six months, underperforming the Zacks Retail-Wholesale sector and the Zacks Internet-Commerce industry’s growth of 4.3% and 5.2%, respectively.Th ...

Core Insights - MercadoLibre's Mercado Pago division has evolved into a significant lender, with a credit portfolio reaching $11 billion by Q3 2025, marking an 83% year-over-year increase [1] - The rapid loan deployment raises concerns about risk management and asset quality, as the company operates in a complex e-commerce ecosystem [2] - The net interest margin after losses (NIMAL) decreased to 21%, and early-stage non-performing loans (NPLs) were at 6.8%, indicating potential stress in the portfolio [3] Financial Performance - The Zacks Consensus Estimate for Q4 2025 Fintech revenues is projected at $3.63 billion, reflecting a 45% year-over-year growth, but also raising concerns about the risk profile due to rapid credit deployment [4] - MELI's share price has increased by 21% year-to-date, outperforming the Zacks Internet-Commerce industry and the Retail-Wholesale sector [7] Competitive Landscape - MercadoLibre faces strong competition from Sea Limited and Nu Holdings, both of which are aggressively expanding into consumer credit in Latin America [5] - Sea Limited is focusing on personal loans and payment products in Brazil and Mexico, while Nu Holdings is leveraging its user base and analytics to target low-risk borrowers [6] Valuation Metrics - MELI's stock is trading at a forward 12-month Price/Sales ratio of 2.96X, compared to the industry's 2.34X, indicating a higher valuation [11] - The Zacks Consensus Estimate for MELI's Q4 2025 earnings is $11.85 per share, down 18.7% over the past 30 days, suggesting a decline of 6.03% year-over-year [13]

Core Insights - MercadoLibre (MELI) is under increasing scrutiny regarding its ability to maintain profitability while aggressively expanding in Latin America's e-commerce and fintech sectors [1][3] - The company's strategy of lowering free shipping thresholds and expanding logistics has strengthened its ecosystem but also exposes vulnerabilities as it trades short-term margins for long-term scale [1][3] Financial Performance - In Q3 2025, MELI's operating margin decreased by 70 basis points year-over-year to 9.8%, and gross profit margin fell by 260 basis points to 43.3% [2][7] - The growth in logistics efficiency appears to be flattening, with unit shipping costs in Brazil declining only 8% sequentially despite a 42% increase in items sold [2] - Mercado Pago's credit portfolio increased by 83% to $11 billion, but net interest margin after losses compressed to 21%, indicating capital intensity in scaling financial services [2] Growth Estimates - The Zacks Consensus Estimate for Q4 2025 revenues is $8.54 billion, reflecting a 39.48% year-over-year increase [3] - The central issue for MercadoLibre is whether its growth can coexist with healthy profitability, as rising logistics and credit costs challenge the balance between expansion and earnings [3] Competitive Landscape - MercadoLibre faces intensified competition from Sea Limited and Amazon, both of which are expanding their presence in Latin America's e-commerce and fintech markets [4] - Sea Limited is enhancing its Shopee platform and digital finance services, while Amazon is strengthening its logistics and local marketplace capabilities [4] Stock Performance and Valuation - MELI shares have risen by 23.4% year-to-date, outperforming the Zacks Internet-Commerce industry and the Zacks Retail-Wholesale sector [5] - The stock is currently trading at a forward 12-month Price/Sales ratio of 3.03X, compared to the industry's 2.48X, indicating a relatively higher valuation [9] - The Zacks Consensus Estimate for MELI's 2025 earnings is $40.27 per share, down 6.8% over the past 30 days, suggesting a year-over-year growth of 6.85% [11]

Core Insights - JD.com is expected to report third-quarter 2025 results on November 13, with revenue estimates at $41.33 billion, reflecting an 11.4% year-over-year growth, while earnings per share are projected at 46 cents, indicating a 62.9% decline from the previous year [1][9] Earnings Performance - In the last quarter, JD.com achieved an earnings surprise of 13.76%, consistently beating the Zacks Consensus Estimate over the past four quarters with an average surprise of 18.89% [2] Earnings Predictions - Current analysis indicates a negative Earnings ESP of -3.30% and a Zacks Rank of 3 (Hold), suggesting uncertainty regarding an earnings beat this quarter [3] Growth Factors - JD.com entered Q3 2025 with strong momentum, reporting a 22% year-over-year revenue growth in Q2, with active customer engagement increasing over 40% [4] Retail Performance - Continued strength in JD Retail is anticipated, with prior revenue growth of 21% and an operating margin of 4.5%. Categories like electronics and home appliances benefited from government trade-in incentives, while general merchandise showed steady growth [5][9] Food Delivery Segment - JD Food Delivery, launched in February, is expected to have expanded its logistics and merchant base, although high operating costs may have impacted profitability [6] Strategic Acquisition - JD announced a voluntary public takeover offer for CECONOMY AG, valued at EUR 2.2 billion, highlighting its international diversification strategy, though it may face regulatory and integration challenges [7][18] Stock Performance - JD.com shares have declined 8.3% year-to-date, underperforming compared to the Internet-Commerce industry and major indices, while competitors like Amazon and PDD Holdings have seen significant stock appreciation [10] Valuation Metrics - JD.com currently trades at a forward P/E ratio of 9.06X, significantly lower than the industry average of 25.33X, indicating a potentially undervalued position relative to expected earnings growth [13][18] Investment Considerations - JD.com shows stable growth prospects supported by retail demand and strategic diversification, but ongoing investments in logistics and international ventures may pressure near-term profitability [15][19]

Core Insights - MercadoLibre (MELI) reported Q3 2025 earnings of $8.32 per share, missing estimates by 11.77% but increasing 6.26% year over year. Revenues rose 39.5% year over year to $7.41 billion, surpassing estimates by 2.15% [1][9] Revenue Breakdown - Total revenues were driven by strong growth in commerce and fintech segments, which grew 33% and 49% year over year to $4.17 billion and $3.24 billion, respectively [2] - Brazil generated $4.01 billion in net revenues (54.1% of total), up 37.6% year over year. Mexico's revenues reached $1.65 billion (22.3% of total), increasing 44.2% year over year. Argentina's revenues were $1.44 billion (19.4% of total), reflecting a 39.5% year-over-year increase [5] - Other countries contributed $308 million (4.2% of total revenues), representing a growth of 39.4% year over year [6] Key Metrics - Gross Merchandise Volume (GMV) was $16.5 billion, increasing 28% year over year and 35% on a foreign exchange-neutral basis [7] - Items sold grew 39.3% year over year to 635.2 million, with unique buyers increasing by 26% to 76.8 million [3] - Fintech Monthly Active Users rose 29% year over year to 72.2 million, with Assets Under Management growing 89% to $15.1 billion [3] Advertising and Market Performance - Revenues from advertising services rose 56% year over year on a reported basis and 63% on a foreign exchange-neutral basis [4] - MELI's shares appreciated 35% year-to-date, outperforming the Internet-Commerce industry's return of 12.1% [4] Operating Details - Gross margin contracted to 43.3%, while operating margin declined 70 basis points to 9.8% [9][11] - Operating expenses increased 32% year over year to approximately $2.5 billion, but as a percentage of revenues, it contracted to 33.5% [11] Financial Position - As of September 30, 2025, cash and cash equivalents were $2.58 billion, down from $3.01 billion as of June 30, 2025. Net debt increased to $4.6 billion [13]

Core Insights - JD.com is transitioning from a domestic e-commerce leader to a globally integrated logistics and retail ecosystem, enhancing its global supply chain capabilities [1][2] - The company is expanding its infrastructure in Europe and the Middle East to support its logistics services and improve delivery efficiency [2][7] - JD.com aims to leverage automation and data analytics to reduce logistics costs and create new revenue streams [3] Expansion and Infrastructure - In Europe, JD.com is building warehouse and retail infrastructure and plans to launch localized e-commerce formats [2] - In the Middle East, JD.com is developing logistics hubs for storage, customs, and last-mile delivery for enterprise clients [2] - These initiatives reflect JD's long-term vision of establishing a global supply chain network for efficient cross-border commerce [2] Financial Performance and Estimates - The Zacks Consensus Estimate for JD's Q3 2025 total revenue is $41.33 billion, indicating an 11.40% year-over-year increase [3][7] - The consensus estimate for earnings per share (EPS) is 46 cents, which is a 62.9% decline year-over-year [3] - JD.com is currently trading at a forward price-to-earnings ratio of 9.74X, significantly lower than the industry average of 23.71X [9] Competitive Landscape - JD.com faces increasing competition from Alibaba and PDD Holdings, both of which are expanding their international presence [4] - Alibaba's Cainiao network is enhancing its logistics capabilities in Asia and Europe, while PDD Holdings is leveraging cost advantages through its platform Temu [4] - JD's ability to maintain efficiency and margin discipline will be crucial for sustaining its competitive edge [4] Valuation and Market Performance - JD.com's shares have declined 2.7% year-to-date, underperforming the Zacks Internet-Commerce industry and Retail-Wholesale sector [5] - The Zacks Consensus Estimate for JD's 2025 earnings is $2.80 per share, reflecting a 34.27% decline year-over-year [11]

Core Insights - Alibaba Group (BABA) is at a critical juncture as it approaches 2025, with a price-to-sales multiple of 2.58 times raising concerns among investors about its ability to regain former success [1] - The company faces disappointing growth projections, with fiscal 2026 revenues estimated at $144.68 billion, reflecting only 4.73% year-over-year growth, significantly below historical performance [2] - Anticipated earnings for fiscal 2026 are projected to decline by 27.08% year-over-year to $6.57 per share, indicating deeper operational challenges beyond revenue stagnation [2] Financial Performance - The Zacks Consensus Estimate for fiscal 2026 indicates a troubling revenue growth trajectory, hindered by domestic competition, regulatory pressures, and a slowing Chinese economy [2][3] - Alibaba's forward 12-month price-to-sales ratio of 2.58 times is higher than the Zacks Internet-Commerce industry average of 2.23 times, suggesting a disconnect between market valuation and fundamental performance [6] Strategic Initiatives - The company is investing $52 billion over three years in AI infrastructure, which may strain profitability during a time of weak consumer demand in China [4][8] - Alibaba's shift towards self-developed AI training chips aims to enhance cost optimization and supply chain resilience amid geopolitical tensions, although it requires significant upfront investment [4] Competitive Landscape - Alibaba is facing increasing competitive pressure in AI from major players like Amazon, Microsoft, and Alphabet, which have established strong positions in AI capabilities and infrastructure [10] - The company's stock performance, with a 54.1% return over the past six months, is underwhelming compared to competitors that are effectively monetizing AI technologies [10] Investment Outlook - Given the deteriorating fundamentals and the challenges associated with funding an expensive AI transformation, investors are advised to consider alternative growth opportunities [14]

Core Insights - JD.com shares have declined 18.4% over the past year, underperforming the Zacks Internet-Commerce industry's growth of 18.7% and the Zacks Retail-Wholesale sector's return of 11.6% [1][19] - The decline is attributed to cautious sentiment regarding JD's shifting business mix, near-term margin pressures, and slower cash flow recovery due to investments in new verticals and international operations [1][19] Financial Performance - JD's food delivery expansion has led to an operating loss of RMB 14.8 billion in Q2 2025, impacting overall profitability [5][7] - The company's free cash flow has decreased significantly to RMB 10.1 billion from RMB 56 billion a year earlier, indicating pressure from investment-heavy growth and working capital [9] - The Zacks Consensus Estimate for JD's Q3 2025 revenues is $41.21 billion, reflecting an 11.06% year-over-year increase, while the estimate for 2025 revenues is $183.33 billion, suggesting a modest 5.15% rise [9] Competitive Landscape - JD faces intensified competition from PDD Holdings and Alibaba, which are impacting its market share and profitability [7][8] - PDD's aggressive discounting and Alibaba's asset-light strategy are sustaining price pressures across various categories [8][10] Valuation Metrics - JD shares are currently undervalued, trading at a forward 12-month price-to-earnings ratio of 10.34x, significantly lower than the industry's average of 24.11x and the sector's average of 24.5x [11][12] - The valuation discount reflects JD's transition towards a more diversified growth model, with potential upside as operating efficiency improves [12][13] Strategic Initiatives - JD's shift from a centralized retail model to a hyperlocal logistics network aims to enhance user engagement and repeat spending, although achieving scale efficiency will take time [6][19] - The proposed acquisition of CECONOMY in Europe could strengthen JD's international presence and add a new revenue stream from higher-margin markets [12] Future Outlook - JD is expected to remain in a reinvestment phase, focusing on strengthening its ecosystem rather than immediate earnings expansion [18][19] - Execution discipline will be critical in determining when margins stabilize, as the company balances diversification with cash flow constraints [16][18]