MercadoLibre Inc (NASDAQ: MELI), often dubbed the “Amazon of Latin America,” operates the region’s largest online marketplace—and it’s been steadily gaining market share for the past three years. Like Amazon (NASDAQ: AMZN) or eBay (NASDAQ: EBAY), it sells everything from electronics to apparel to household goods. But a more complete comparison would include PayPal (NASDAQ: PYPL) and FedEx (NYSE: FDX), too, given their deep presence in online payments and logistics.
What truly sets MercadoLibre apart is its powerful network effect: more sellers attract more buyers, and more buyers draw in more sellers, compounding growth and strengthening its moat. That momentum is reflected in the stock, which is up roughly 50% year to date, far outpacing the S&P 500’s 4% gain. Separately see, Is EOG Stock a Bargain at $120?
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A Blowout First Quarter
MercadoLibre delivered strong results in Q1 2025, with revenue surging 37% to $5.9 billion and net income jumping 44% to $9.74 per diluted share. Gross merchandise volume grew 40% year-over-year on a currency-neutral basis, while items sold rose 28% and unique active buyers increased 25%. The company’s fintech segment was a standout, with total payment volume up 72% and monthly active users climbing 31% to 64 million. Mercado Pago, its payments arm, now processes over $230 billion in annualized volume, more than 75% of which comes from outside its e-commerce platform, underscoring its reach beyond retail. Meanwhile, the credit portfolio expanded 75%, and assets under management more than doubled, cementing MercadoLibre’s position as a leading digital financial services provider in the region.
Is MELI Stock Still a Buy?
MELI trades around $2,540 per share, equating to 45x forward earnings and 4.2x forward sales. Compare that to Amazon, which trades at 33x earnings and 3.1x sales, but with a much slower growth rate. MercadoLibre’s $129 billion market cap still makes it a small fish compared to Amazon’s $2.25 trillion, or Alibaba’s $275 billion, suggesting ample room to grow.
Wall Street expects 30% annual earnings growth over the next 4 years. That makes its current trailing P/E ratio of 62 look reasonable, especially if it can hit those targets. Under that scenario, MercadoLibre’s market cap could top $300 billion within four years, even with valuation multiples compressing.
Latin America’s Digital Boom Is Just Beginning
Between 2021 and 2024, MercadoLibre grew revenue at a 43% CAGR, ending last year with over 100 million buyers and 60 million fintech users—still just a slice of the region’s 451 million adults. With rising internet access and income levels, MercadoLibre is well-positioned to ride Latin America’s digital tailwinds.
Latin America’s e-commerce penetration remains in the mid-teens, well below U.S. levels, while cash usage is dropping fast. In South America, cash made up 57% of payments in 2022; it’s now 37% and could fall to 17% by 2030. Meanwhile, record smartphone adoption—137 million units shipped in 2024—is fueling mobile commerce growth. Latin America’s e-commerce market is expected to grow 21% in 2025 to $769 billion, en route to $1 trillion by 2027—nearly double its 2023 size.
Bottom Line
MercadoLibre is riding multiple megatrends – e-commerce, fintech, logistics, and digital advertising—all within an underpenetrated, fast-growing region. The company reported 38% revenue growth and 90% GAAP earnings growth in 2024, and analysts expect this momentum to continue going forward. Yes, the stock isn’t cheap. And yes, volatility is a risk, as it is with any high-growth tech name. But for long-term investors betting on digital transformation in Latin America, MercadoLibre offers a rare blend of scale, momentum, and room to run. As with any investment, it’s essential to weigh the pros and cons carefully and consider diversified options to minimize risk. The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index, less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.
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