Brad Freeman
Equity Researcher, Creator of Stock Market Nerd
MercadoLibre's marketplace repayment data means much sharper fintech risk pricing, much more revenue per user, a much better loyalty program and even lower churn. Its fintech already has rapidly growing engagement and resilient cross-cycle underwriting; relatively high GDP per capita alongside heavy cash use leaves room to displace cash. Both its marketplace and fintech are growing rapidly. x.com x.com
MercadoLibre's commerce and fintech revenue growth underpins the view that its shares are undervalued at current prices. The attached chart shows quarterly commerce services revenue reaching $4.3 billion and fintech revenue $4.4 billion in June 2026, up from $769 million and $467 million in March 2021. x.com
Nu and MercadoLibre's biggest secular-growth advantage is resilience to electoral and macro shocks. Nu hit 139 million customers and $1 billion quarterly net income through Brazil's recession, impeachment and pandemic. MercadoLibre survived the dot-com crash and devaluations; Mercado Pago has nearly 78 million monthly users and credit growth above 90% year on year. With regional e-commerce growing 15%-20% annually, their value through 2027 depends on adoption and delinquencies, not one election. … Show more
MercadoLibre's collapsing margins and earnings make its 45-times-earnings valuation look like a value trap. It faces intense competition, and less of its revenue reaches the bottom line; falling earnings make the stock more expensive even as its price falls. Nu Holdings trades at 17 times earnings and Inter & Co at 7 times, with both growing revenue and earnings robustly. Selling MercadoLibre to build positions in companies with better fundamentals is under consideration. x.com x.com x.com x.com
MercadoLibre is Amazon, PayPal, FedEx and a bank in one, building Latin America's digital infrastructure in early innings with a full-stack data moat no rival has matched across 18 countries. Mercado Pago processes $87B a quarter, two-thirds outside the marketplace, and banking licenses cut out middlemen; logistics delivers 80% of goods within 48 hours and credit defaults run near half the industry rate. Q1 revenue grew 49% to $8.85B. Margin pressure from heavy investment is the trade-off. x.com
MercadoLibre deserves its premium to Sea because it has become a financial institution with a marketplace attached. Mercado Pago's off-platform volume now exceeds on-platform, and Brazilian payment-institution status lets it hold balances, lend and earn net interest margin, while Sea relies on volatile Garena gaming profits to fund Shopee. MELI earns 20% ROIC with eleven straight quarters of positive free cash flow. Risks are loans outgrowing revenue with flat provisions, reinvestment and fuel. … Show more
MercadoLibre may not be a buy yet, since its margin-compressing investment cycle looks set to run for a while. An AI-assisted review of gross and operating margins against prior investment cycles points that way, after a first read of the risk/reward had looked like a buy. The stock is worth revisiting at the end of the year. x.com x.com
MercadoLibre's fintech arm is the less understood part of a company everyone sees as the Amazon of Latin America. Mercado Pago has grown from a checkout tool into a massive digital bank used across the region, taking a cut of card, app and QR payments, earning high interest on small loans to consumers and sellers through Mercado Crédito, and offering savings and investment tools. x.com x.com
MercadoLibre is the backbone of Latin American digital commerce, and its ecosystem keeps feeding its own growth. E-commerce, Mercado Pago payments, credit, logistics and advertising reinforce each other, as more users bring more transactions, more data and better monetization. Execution is elite, with about 39% revenue growth, about 52% free cash flow growth and expanding margins. The valuation is not cheap, but great businesses rarely are, and this is what long-term compounding looks like. … Show more
MercadoLibre falls into the disliked software sector despite being a big platform with fintech, and there are many hungry Latin Americans who want to use AI to build software too. x.com
MercadoLibre's huge Mercado Pago user base could make individual stock trading hard for Argentine brokers to compete with. Retail users already keep money in the app, pay bills, receive salaries and make transfers, so adding shares there could be a game changer even if the brokerage is only good enough; the UX can improve over time. FromValue reports that Marcos Galperin said the feature is due in a few months. x.com x.com
