10Y annualized return is
excellent
at 31.9% per year
MELI has met or exceeded earnings expectations in
all
recent quarters (0/0)
Strong Return on Equity
Solid Gross Profit Margin
Adequate Liquidity Ratios
Strong Interest Coverage
🏆 Strong Market Position
🚀 Strategic Investments in Growth
📈 Positive Financial Performance
🌍 Large Growth Opportunities
💡 Continuous Innovation
📊 Positive Economic Indicators
High Valuation Ratios
Moderate Net Profit Margin
High Debt Levels
⚠️ Margin Pressures from Investments
📉 Risks from Economic Volatility
MercadoLibre demonstrates a strong business model with significant competitive advantages in the e-commerce and fintech sectors. The company's strategic investments and positive financial performance point to robust future growth opportunities, although there are potential risks associated with margin pressures and economic volatility.
Analysis Date: February 20, 2025
Last Updated: March 12, 2025
Past performance does not guarantee future results. The data presented is indicative and may not be updated in real-time.
MercadoLibre, Inc. is like the eBay or Amazon of Latin America, where people can buy and sell things online. They have a website and app called Mercado Libre that lets businesses and individuals list their products for sale. They also provide a payment service called Mercado Pago, which makes it easy for users to send and receive money online. Additionally, they offer tools for advertising, setting up online stores, and even help with shipping products to customers. Overall, MercadoLibre connects buyers and sellers while making online shopping simpler and safer.
Core Products
Business Type
Platform/Marketplace
Competitive Advantages
Key Business Risks
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$1451.23
Current Market Price: $1841.29
IV/P Ratio: 0.79x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
-27.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for MELI
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (48.85)
P/B ratio ≤ 1.5 (21.45)
Current ratio ≥ 2.0 (1.21x)
Long-term debt < Net current assets (1.07x)
Margin of safety (-27.0%)
MELI does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
49.64%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-30)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
46.09%
Higher values indicate better efficiency in production
TTM (as of 2025-04-30)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
9.20%
Higher values indicate better overall profitability
TTM (as of 2025-04-30)
MELI's gross profit margin is 46.09%, which indicates that it retains a significant portion of revenue after accounting for the cost of goods sold, reflecting a strong pricing strategy.
The net profit margin of 9.20% suggests that there is room for improvement in managing expenses and enhancing overall profitability.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
1.57x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
1.21x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
The current ratio of 1.21 and quick ratio of 1.20 indicate that MELI has sufficient short-term assets to cover its short-term liabilities, suggesting good liquidity.
An interest coverage ratio of 15.95 indicates that MELI can comfortably meet its interest obligations, reflecting a strong ability to service debt.
The debt-to-equity ratio of 1.57 indicates a high level of debt compared to equity, which may pose risks if the company faces downturns.
Meeting Expectations
Higher values indicate better execution and credibility
Recent Results
MercadoLibre has established a leading position in e-commerce and fintech in Latin America, achieving significant market share gains. With over 100 million unique buyers and 60 million monthly active users on its platforms, the company demonstrates robust user loyalty and trust.
The company continues to invest heavily in logistics and fintech infrastructure, which are critical enablers for reducing friction in online commerce. The opening of new fulfillment centers and expansion of free shipping offerings have driven new buyer acquisition.
In 2024, MercadoLibre reported $21 billion in revenue and generated over $1 billion in free cash flow, showcasing its ability to drive profitable growth while making significant investments.
Despite strong growth, the company acknowledges that its investments could lead to short-term pressure on margins. This indicates a potential risk in balancing growth with profitability.
MercadoLibre is well-positioned to capitalize on the low penetration rates of e-commerce and financial services in Latin America. The company's strategic focus on digital banking and fintech solutions is expected to drive substantial growth.
The company is committed to enhancing user experience through technology and innovative features, such as dynamic pricing and personalized seller tools, which are expected to improve engagement and retention.
In regions like Argentina, positive macroeconomic signals and recovery in consumer behavior suggest a robust growth outlook for the fintech business, with the potential for significant market share increases.
The company remains cautious in its credit issuance due to potential macroeconomic instability in key markets, particularly Brazil and Argentina. This caution could limit growth potential in the short term.
