Enes Uludağ
US Equity & Global Macro Analysis, Financial Statements & Sector Research
MercadoLibre's margin compression may not be structural, and a director's open-market purchase supports that view. Director Alejandro Aguzin bought about $1M of shares two weeks after the post-earnings selloff, when the market panicked over a 6.9% operating margin despite 49% revenue growth. Insiders rarely buy unless they see value. x.com
Latin American equities' sell-off looks overdone as long as the underlying businesses keep growing and fundamentals remain intact. Under that condition, the drop is market noise, and MercadoLibre and Nu Holdings could offer attractive opportunities amid the panic. 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
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 a one-of-a-kind compounder that the market is wrongly punishing for reinvesting its profits. It has grown revenue more than 30% for 30 quarters in a row, which no company has ever done, and growth is accelerating, now around 50% year on year. x.com
MercadoLibre's growth under Lula makes today's selloff look absurd. On a TTM basis since Q1 2023, revenue is up 206% and EPS 200%; having done so well during his term, it should be fine going forward. x.com x.com
South American political unpredictability keeps investors from rewarding MercadoLibre's excellent fundamentals. Today's selloff illustrates that risk, despite the strength of the business. 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's 20% drop after a strong Q4 is not a reason to sell, because Latin American fintech is a decade-long story and the market is wrong more often than the business. Q4 revenue rose 45% to $8.8B, the stock now trades under 30x forward earnings, and MercadoPago is a moat within a moat. x.com
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.com
MercadoLibre's long-term thesis looks intact: heavy reinvestment is holding down near-term margins, but if it drives continued growth and eventually operating leverage, margins and earnings could expand substantially. The stock was extremely expensive five years ago, and its valuation has compressed significantly since. As with Amazon, the market doesn't trust the spending yet, but Meta showed how fast that can change. x.com x.com
