MercadoLibre: Even With A Premium, The Stock Has Room To Grow

Eliana Scialabba
238 Followers
(10min)

Summary

  • MercadoLibre's net revenues reached $5.9B in Q1 2025 (+37% YoY, +64% FX-neutral), driven by triple-digit growth in Argentina and solid expansion in Brazil and Mexico.
  • Operating income rose 45% YoY to $763M (12.9% margin); net income hit $494M with an 8.3% margin, showing profitable growth despite reinvestment.
  • EPS grew 82% YoY; P/E FWD remains high at 51.9x, but valuation has compressed versus 5Y averages, with EPS expected to grow +28.8% CAGR.
  • Strong margins, ecosystem scale, and visibility into future growth support a buy rating for MELI despite regional macro and regulatory risks.
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Tevarak

Since I published my last analysis of MercadoLibre (MELI) in April, the company hasn't stopped moving. Far from resting on its laurels, it has continued to make key strategic decisions that only serve to reinforce its regional leadership. One of the

This article was written by

238 Followers
I am an individual investor with over five years of experience in personal investing, holding a PhD in Economics from UCEMA. My investment approach focuses on value companies with solid long-term potential. I share my knowledge with the community by offering analysis to support individual investors. My articles reflect personal opinions and do not constitute financial advice.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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