One-glance verdict
Undervalued
$6,390.15 our estimate vs market $1,808.17
Wall Street consensus: $2,273.86 (-64.4% lower than our fair-value estimate)
72% below our estimate, below the bear case
Fundamentals snapshot
MercadoLibre, Inc.
MELI · NMS · Consumer Cyclical · Internet Retail
Current price
$1,808.17
52-week range
$1,495.00 - $2,428.00
Market cap
$91.67B
Balance sheet
Stretched
20.01x Strong cushion
Net debt $7.46B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Revenue grew 21.8% last year.
- Reward Returns 27.5% on equity, ahead of 50% of its peers.
- Risk Net debt grew 146.6% over 3 years.
- Risk Operating margin compressed from 9.9% to 6.7% over 3 years.
What this company does
MercadoLibre, Inc.
MercadoLibre is like an online shopping mall combined with a digital bank, primarily operating in Latin America. It makes money by taking a cut from sales on its online marketplace and by offering payment and lending services through its financial technology platform, Mercado Pago, which is like a digital wallet and bank for its users. This two-pronged approach, selling goods and providing financial services, helps them build a sticky customer base where people use both sides of their business.
How the company got here
MercadoLibre started in 1999, inspired by eBay, to create an online marketplace for Latin America. It quickly became the go-to place for buying and selling goods across the region. A key moment was the development of Mercado Pago, its own payment system, which helped overcome the challenges of online transactions in countries with varying financial infrastructures. This move transformed MercadoLibre from just an online store into a broader e-commerce and financial services ecosystem.
What it actually does
Think of MercadoLibre as the Amazon and PayPal of Latin America, all rolled into one. It's a massive online shopping platform where people can buy almost anything, from electronics to clothing, directly from sellers. But it's more than just a place to shop; it also handles the payments for those purchases through its own system, making transactions smoother and more secure for everyone involved.
Mercado Libre Marketplace
This is the core of MercadoLibre, its online shopping website and app. It's where individuals and businesses list items for sale, and shoppers can browse and buy them. The marketplace handles everything from product listings to customer reviews, creating a vast digital storefront for millions of products across Latin America. It's the engine that drives most of the company's user activity and a significant portion of its revenue.
Mercado Pago
Mercado Pago is MercadoLibre's financial technology arm, acting like a digital wallet and payment processor. It allows users to make purchases on the Mercado Libre marketplace, send money to friends, and even pay bills. For sellers, it provides a secure way to receive payments. This segment is crucial because it simplifies transactions and builds trust in the online shopping experience, especially in regions where traditional banking can be less accessible.
Mercado Envios
Mercado Envios is the company's shipping and logistics service, essentially its own delivery network. It helps sellers get their products from their doorstep to the buyer's doorstep efficiently. By managing the shipping process, MercadoLibre can offer faster delivery times and more reliable service, which is a big plus for online shoppers and a key reason why people choose to buy on its platform.
Mercado Ads
Mercado Ads is how MercadoLibre makes money by selling advertising space on its platform. Brands and sellers can pay to have their products featured more prominently in search results or on product pages. This helps them reach more potential customers who are already actively looking to buy. It's a growing source of revenue that leverages the massive amount of shopper data the company collects.
What management is betting on now
MercadoLibre's leadership is focused on expanding its e-commerce and fintech services across Latin America. They are investing heavily in logistics to make deliveries even faster and more reliable, aiming to capture an even larger share of online shopping. Simultaneously, they are growing Mercado Pago's offerings beyond just payments, moving into areas like credit and investments to become a one-stop financial shop for their users. The goal is to deepen customer loyalty and create a more integrated digital economy within the region.
Price history
How the share price has moved
—
Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$1.38B
FY2024 Q4
$2.62B
FY2025 Q1
$759.00M
FY2025 Q2
$2.63B
FY2025 Q3
$2.60B
FY2025 Q4
$4.78B
FY2026 Q1
$1.80B
FY2026 Q2
$3.22B
Revenue
$10.17B
Net income
$466.00M
Diluted EPS
9.19
Operating cash flow
$3.66B
Free cash flow
$3.22B
Fetching…
Sources
Revenue
$8.85B
Net income
$417.00M
Diluted EPS
8.23
Operating cash flow
$2.08B
Free cash flow
$1.80B
Fetching…
Sources
Revenue
$8.76B
Net income
$559.00M
Diluted EPS
11.03
Operating cash flow
$5.21B
Free cash flow
$4.78B
Fetching…
Sources
Revenue
$7.41B
Net income
$421.00M
Diluted EPS
8.32
Operating cash flow
$2.96B
Free cash flow
$2.60B
Fetching…
Sources
Revenue
$6.79B
Net income
$523.00M
Diluted EPS
10.31
Operating cash flow
$2.92B
Free cash flow
$2.63B
Fetching…
Sources
Revenue
$5.93B
Net income
$494.00M
Diluted EPS
9.74
Operating cash flow
$1.03B
Free cash flow
$759.00M
Fetching…
Sources
Revenue
$6.06B
Net income
$639.00M
Diluted EPS
12.60
Operating cash flow
$2.92B
Free cash flow
$2.62B
Fetching…
Sources
Revenue
$5.31B
Net income
$397.00M
Diluted EPS
7.83
Operating cash flow
$1.60B
Free cash flow
$1.38B
Fetching…
Sources
Is it cheap or expensive?
Fair value $6,390.15 vs current price $1,808.17
Wall Street consensus is the average analyst price target: $2,273.86 (-64.4% lower than our fair-value estimate).
Our most-likely fair value is $6,390.15 a share — about 253.4% above today's price of $1,808.17, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Stretched
Net debt $7.5B. Interest coverage 20.0x.
Net debt
$7.46B
Interest coverage
20.01x
MercadoLibre, Inc.'s profit covers its interest bill about 20.0 times over. which is stronger than most peers shown here.
Stretched
Worse cushion
Baseline
Better cushion
MELI
BASELINE
MercadoLibre, Inc.
Total debt $13.21B Interest coverage 20.01x This is the baseline the peer rows are being compared against.
Total debt $251.64B Interest coverage 35.17x +76% vs MELI Carries about 1.8x more debt cushion than MELI.
Total debt $4.13B Interest coverage 59.07x +195% vs MELI Carries about 3.0x more debt cushion than MELI.
Total debt $14.22B Interest coverage 14.50x -28% vs MELI Carries about 1.4x less debt cushion than MELI.
Total debt $5.63B Interest coverage 5.50x -73% vs MELI Carries about 3.6x less debt cushion than MELI.
What you should know
The case for and against MELI
3 Rewards
3 Risks
Rewards
-
Revenue grew 21.8% last year.
-
Returns 27.5% on equity, ahead of 50% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Net debt grew 146.6% over 3 years.
-
Operating margin compressed from 9.9% to 6.7% over 3 years.
-
Insider ownership is only 7.0% (peer median: 8.9%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
49.18x
Forward P/E
32.15x
P/B
11.70x
P/S
2.61x
EV/EBITDA
26.08x
PEG ratio
1.01x
Profitability
How much profit each dollar creates
Gross margin
47.7%
Operating margin
6.7%
Net margin
5.3%
ROE
27.5%
ROA
4.3%
Health
Liquidity and balance-sheet strength
Debt / equity
1.69x
Current ratio
1.12x
Quick ratio
0.40x
Total debt
$13.21B
Total cash
$5.74B
Growth
How the business has been compounding
Revenue TTM
$35.18B
Revenue 5Y CAGR
42.2%
EPS TTM
36.77
EPS 5Y CAGR
60.5%
Cash flow
How much cash the business throws off
Operating CF TTM
$13.90B
Free CF TTM
$10.77B
FCF margin
30.6%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
2017-12-28