One-glance verdict
Undervalued
$9,099.55 our estimate vs market $1,798.70
Wall Street consensus: $2,214.88 (-75.7% lower than our fair-value estimate)
80% below our estimate, below the bear case
Fundamentals snapshot
MercadoLibre, Inc.
MELI · NMS · Consumer Cyclical · Internet Retail
Current price
$1,798.70
52-week range
$1,495.00 - $2,548.50
Market cap
$91.19B
Balance sheet
Watch
20.01x Strong cushion
Net debt $6.71B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 10.1% last year.
- Reward Returns 31.3% on equity, ahead of 60% of its peers.
- Risk Net debt grew 146.6% over 3 years.
- Risk Operating margin compressed from 9.9% to 6.9% over 3 years.
What this company does
MercadoLibre, Inc.
MercadoLibre is the largest online shopping website in Latin America, where people can buy and sell goods similar to on Amazon. The company makes most of its money from fees on these sales and from its own popular payment service, Mercado Pago, which works like PayPal. This is important because by offering shopping, payments, and shipping all together, it creates a powerful ecosystem (a network of connected services that support each other), making it a one-stop shop for its customers.
How the company got here
Founded in 1999 by Marcos Galperin while he was a student at Stanford University, MercadoLibre started in a garage in Buenos Aires, Argentina. The idea was to create an online marketplace, similar to eBay, specifically for Latin America. To solve the unique challenges of the region, like low bank account usage and unreliable delivery, the company built its own solutions from the ground up. This led to the creation of a payment system, Mercado Pago, and a shipping network, Mercado Envios, which became major businesses in their own right.
What it actually does
Think of MercadoLibre as the Amazon of Latin America, but with a bank attached. It runs the most popular online shopping website in the region, where millions of people buy everything from electronics to clothing. Beyond just the store, it offers a whole system to support buying and selling. This includes a digital wallet for payments, a shipping service that delivers packages, loans for both shoppers and sellers, and an advertising platform for businesses.
Commerce
This is the original and largest part of the company, centered on the Mercado Libre Marketplace, an online shopping website and app. Sellers, from individuals to large brands, pay fees to list their products and a commission (a percentage of the sale price) when an item sells. This segment also includes Mercado Envios, the company's own shipping and logistics (the process of managing how goods are acquired, stored, and transported) network, which sellers use to get products to buyers' doorsteps. A smaller piece of this business is Mercado Ads, where sellers pay to promote their products to stand out on the site.
Fintech
This is the company's fast-growing financial technology arm, with Mercado Pago at its core. Initially created to handle payments on the marketplace, Mercado Pago is now a massive digital wallet that people use for all sorts of things, like paying bills, sending money to friends, or buying things in physical stores using QR codes. The company makes money by charging a small fee on each of these transactions. This segment also includes Mercado Crédito, which offers loans to both consumers for their purchases and to sellers who need working capital (the money used to cover short-term business expenses).
What management is betting on now
The company's main focus is to deepen the connection between its shopping and financial services, creating a self-reinforcing ecosystem (a network of interconnected services that support and strengthen each other). A key priority is expanding its logistics network, building more warehouses and using technology to deliver packages faster and more cheaply. They are also heavily investing in growing their financial offerings, especially the loan business through Mercado Crédito and other services for the large number of people in Latin America without traditional bank accounts. Finally, they are focused on growing their high-margin (meaning it keeps a large percentage of the revenue as profit) advertising business, Mercado Ads, by using the vast amount of shopping data they have.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q2
$1.70B
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
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
Revenue
$5.07B
Net income
$531.00M
Diluted EPS
10.48
Operating cash flow
$1.88B
Free cash flow
$1.70B
Fetching…
Sources
Is it cheap or expensive?
Fair value $9,099.55 vs current price $1,798.70
Wall Street consensus is the average analyst price target: $2,214.88 (-75.7% lower than our fair-value estimate).
Our most-likely fair value is $9,099.55 a share — about 405.9% above today's price of $1,798.70, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Watch
Net debt $6.7B. Interest coverage 20.0x.
Net debt
$6.71B
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.
Watch
Worse cushion
Baseline
Better cushion
MELI
BASELINE
MercadoLibre, Inc.
Total debt $12.38B Interest coverage 20.01x This is the baseline the peer rows are being compared against.
Total debt $3.58B Interest coverage 59.07x +195% vs MELI Carries about 3.0x more debt cushion than MELI.
Total debt $179.00M Interest coverage 1,639.13x +8,093% vs MELI Carries about 81.9x more debt cushion than MELI.
What you should know
The case for and against MELI
3 Rewards
2 Risks
Rewards
-
Revenue grew 10.1% last year.
-
Returns 31.3% on equity, ahead of 60% 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 6.9% over 3 years.
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)
47.38x
Forward P/E
30.82x
P/B
12.52x
P/S
2.87x
EV/EBITDA
24.84x
PEG ratio
1.12x
Profitability
How much profit each dollar creates
Gross margin
49.5%
Operating margin
6.9%
Net margin
6.0%
ROE
31.3%
ROA
5.1%
Health
Liquidity and balance-sheet strength
Debt / equity
1.70x
Current ratio
1.16x
Quick ratio
0.44x
Total debt
$12.38B
Total cash
$5.66B
Growth
How the business has been compounding
Revenue TTM
$31.80B
Revenue 5Y CAGR
42.2%
EPS TTM
37.96
EPS 5Y CAGR
60.5%
Cash flow
How much cash the business throws off
Operating CF TTM
$13.16B
Free CF TTM
$10.77B
FCF margin
33.9%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
2017-12-28