Hated Moats Investor
Contrarian Quality-Stock Research, 25 Years in Markets, GOOGL Since 2011
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.comÂ
MercadoLibre is cheap against its cash earnings, at 24x trailing and 16x next year's, while retailers usually get 20x. Fair value runs $2,075 to $2,642, or 20x next year's cash earnings give or take 12%, putting the $1,869 price 10% under the low end; it would be expensive above $2,328. The read leans on the forecast, with forward earnings 51% above trailing, and is a valuation view only, with no fundamental work. x.comÂ
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.comÂ
MercadoLibre seems cheap at roughly 3x enterprise value to sales given revenue is up about 700% while its stock price is back at 2020 levels. It is hard to see how the multiple can keep compressing. x.comÂ
MercadoLibre is compounding faster than the market gives it credit for, trading at 30x forward earnings with 37% estimated 2027 EPS growth per @DimitryNakhla's list, below its growth rate on a PEG basis. FICO shows the same at 25x with 27% growth, part of a quality discount broader than most people realize. x.comÂ
Political uncertainty and Amazon competition have held MercadoLibre's stock back despite a humming business. The company is great and the stock deserves to turn, but at roughly 45 times earnings and only about 12% gained over five years, it has remained a difficult stock to own. x.com x.com x.com x.comÂ
MercadoLibre looks cheap for its projected growth. Revenue is estimated to rise from $28.89 billion in 2025 to $65.81 billion in 2028, a 32% annual rate, with EPS growing from $39.40 to $90.14, leaving the stock at 18.1x 2028 EPS. Forecasting revenue, margins and earnings that far out is not easy, though. x.comÂ
MercadoLibre is a no-brainer at just 10x 2030 EBIT, as Goldman Sachs predicts its EBIT margin will return to double digits by 2030 and projects $10.7B of EBIT that year. Strong double-digit growth is expected to persist for years beyond 2030. x.comÂ
MercadoLibre can tread water for a long time because it constantly has to spend to defend its revenue base. It is a very capital-intensive business trading at more than 40x forward earnings, leaving it vulnerable if revenue ever slows. x.comÂ
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