Company Overview
MercadoLibre, Inc., founded in August 1999 in Buenos Aires by Marcos Galperin (with co‑founder Stelleo Passos Tolda), is the dominant e‑commerce and fintech platform across Ibero‑America. Operating headquartered in Montevideo, Uruguay, it now serves 18 Latin American markets. Over time, it has expanded beyond online marketplace services to offer integrated payments, credit, advertising, logistics, and merchant tools. The company is listed on NASDAQ under MELI and continues to scale rapidly across commerce and digital finance.
Most Recent Earnings (Q2 2025, period ended June)
In Q2 2025, MercadoLibre delivered revenue of $6.79 billion, up roughly 34% year‑over‑year, surpassing consensus expectations of approximately $6.6–6.7 billion. Adjusted EPS came in at $10.31, missing the expected range of ~$11.9 (or ~$12.0), representing a ~13% EPS miss.
While net income was $523 million, it fell short of analysts’ $596 million estimate. Growth in gross merchandise value (~37%) and fintech payments (~39%) was strong, but accelerated free‑shipping initiatives in Brazil compressed margins—EBIT margin declined to 12.2% from 14.3% last year, with EBIT at $825 million, also missing consensus.
Management emphasized that margin headwinds—driven by the Brazil free‑shipping expansion and increased marketing—are short‑term sacrifices to seize long‑term growth opportunities. Guidance for upcoming quarters remains confident.
Founding, Funding & Business Model
Founded on August 2, 1999, by Marcos Galperin during his MBA at Stanford, MercadoLibre received early backing from investor John Muse, followed by capital from Goldman Sachs, eBay (which acquired ~20% in 2001), JPMorgan, Banco Santander, and others.
Headquartered formerly in Buenos Aires, the official headquarters moved in 2021 to the World Trade Center in Montevideo, Uruguay.
Its platform includes:
- Marketplace for consumer and merchant sales (new and used goods)
- Mercado Pago (payments, wallets) and Mercado Crédito (digital lending)
- Mercado Envíos (logistics/delivery)
- Mercado Ads, Mercado Shops, and Mercado Coin for advertising, merchant storefronts, and crypto services. Key competitors include Amazon, eBay, PayPal, regional fintech players like Nubank and Ualá, and global digital ad platforms.
Market Landscape & Growth Outlook
MercadoLibre operates in two converging high-growth markets: Latin American e‑commerce and digital financial services. Analysts forecast regional e‑commerce CAGR around 20–24% through 2030, while fintech services are projected to grow even faster, with 19–20%+ CAGR in payments and credit markets.
GlobalData places its current market cap around $120 billion, with free cash flow exceeding $7 billion in 2024—achieved with minimal dilution. The fintech division alone has expanded at ~72% FX‑neutral and e‑commerce at ~59% growth in recent forecasts to 2028.
Base case models suggest revenue could reach $50–60 billion by 2030, with a blended earnings growth expected at 30–35% per annum—implying potential market cap of $250–330 billion by decade’s end.
Competitor Landscape
Major competitors include global players like Amazon, eBay, and PayPal, as well as regional digital finance firms such as Nubank and Ualá. Technology giants like Alphabet (Google) and Mercado Ads also vie for advertising revenue.
These competitors threaten at various levels: Amazon competes in logistics and marketplace presence; Nubank and Ualá compete directly in digital payments and lending.
Competitive Differentiation
MercadoLibre’s unique advantage lies in its integrated ecosystem, combining marketplace commerce, logistics infrastructure, payments, and loans under one roof. This closed‑loop model enables strong cross‑sell, network effects, and scalability across both sides of its platform.
Its regional leadership in 18 Latin markets and sophisticated logistical footprint, paired with diverse services (ads, crypto, shops), further distinguishes it from standalone competitors.
Management Team
- Marcos Galperin – Founder, Chairman, President and CEO; architect of the platform and ecosystem expansion.
- Martin de los Santos – Chief Financial Officer, managing financial strategy, margins, and credit portfolio scaling.
- Daniel Rabinovich – Chief Operating Officer, leading operations, logistics (Mercado Envíos), and marketplace execution.
Financial Performance (Last 5 Years)
MercadoLibre has delivered stellar growth: from 2021 to 2024, revenue grew at ~43% CAGR, expanding its user base to over 100 million buyers and 60 million fintech users (still a fraction of Latin America’s ~450 million adults).
Net income and operating earnings have surged—operating profit increased at ~32% CAGR since 2020, while net income grew at ~37% CAGR.
Balance sheet remains robust: ample cash flow (>$7 billion 2024), manageable leverage, and low dilution, enabling investments in logistics, fintech, and regional expansion.
Throughout this period, earnings per share growth has been strong—models expect EPS CAGR approaching 48%through mid‑2020s.
Bull Case
- Continued high‑teens to low‑30s revenue and earnings CAGR driven by fintech scale and marketplace growth.
- Ecosystem synergy and network effects allow profitable cross‑sell, margin expansion over time.
- Market cap could rise to $250 b–$330 b by 2030, based on earnings growth and improving multiples.
Bear Case
- Margin pressure from aggressive initiatives (e.g. free‑shipping) or regulatory backlash in key markets like Brazil.
- Currency depreciation (e.g. Argentine peso) and tax changes reducing net profitability.
- Intensifying competition from Amazon, global fintech firms, and regulatory scrutiny impacting execution.
Analyst Reactions & Price Targets
Following Q2 2025 earnings, analysts at Santander noted the net income miss but maintained long‑term conviction, suggesting limited revisions to estimates.
IBD analysts reaffirmed strong ratings (Composite/EPS ratings ~98–99), with price‑target commentary around $2,635–2,800, citing technical formation (flat base) and positive technical momentum.
Valuation Comparison vs. Top Competitors
Competitor Metrics (approximate 2024–2025 figures):
- MercadoLibre: Revenue growth ~34–43%, net income growth strong, Mkt cap ~$120–122 b.
- Amazon (AMZN): Global e‑commerce giant, e‑commerce growth in single digits to low teens, net income modest margins, market cap in the trillions.
- PayPal (PYPL): Digital payments specialist, revenue growth mid‑teens, net income modest, market cap ~$100–200 b.
- eBay (EBAY): Mature e‑commerce, growth low-single digits, net income stable, market cap ~$30–40 b.
MercadoLibre sits between PayPal and Amazon in valuation and growth—but with significantly higher growth rates and profitability execution potential.
Charts
The stock is in a stage 3 neutral consolidation phase with a move lower to the $2227 range where there is support but it could head a little lower to $2200 range as well. We would be buyers in that range at the 200 day moving average.