MercadoLibre Stock Price Forecast - MELI Holds $2,420 on E-Commerce and Fintech Momentum

MercadoLibre (NASDAQ:MELI) Stock Analysis: E-Commerce Scale, Fintech Growth, and Valuation Dynamics

MELI Stock Holds $2,420 After Q2 Growth Across Brazil, Mexico, and Argentina

MercadoLibre (NASDAQ:MELI) trades at $2,420.50, up 2% in today’s session, with a market cap of $122.7 billion. The company continues to dominate Latin American e-commerce with gross merchandise volume reaching $15.3 billion in Q2 2025, a 21% increase year-on-year or 37% on a currency-neutral basis. Brazil remains the largest market, with GMV up 18%, followed by Mexico at 16% and Argentina surging 35%. Revenues for the quarter climbed 34% to $6.8 billion, underscoring resilience across both commerce and payments. Marketplace sales reached 550 million items, growing 31% year-on-year, and commerce revenue totaled $3.0 billion, up 21%.

Fintech Expansion Anchors MercadoLibre’s Diversification

The fintech division continues to be a growth engine. Mercado Pago, now serving 67.6 million active users, expanded 30% compared to the prior year, adding 15.6 million new customers over the last twelve months. Fintech revenue reached $1.6 billion in Q2, up 40% year-on-year, with Brazil contributing 46% of the total. The total payment volume processed was $64.6 billion, up 39% year-on-year, while the credit portfolio surged 91%. Credit cards expanded 118% year-on-year, strengthening MELI’s push into consumer lending. Non-performing loans over 90 days edged higher to 18.5%, but earlier stage delinquencies declined, showing risk controls are tightening.

Advertising and Ecosystem Strength Provide New Levers

Advertising revenue rose 38% year-on-year, supported by AI tools that boost seller monetization. With digital advertising still underpenetrated in Latin America, MercadoLibre’s ecosystem positions it well to capture market share. Logistics remains a differentiator: its delivery network covers most of Brazil, Mexico, and Argentina, enabling same-day and next-day delivery in key urban centers. This logistics moat reinforces stickiness, driving more sellers and buyers into the closed-loop system that integrates payments, credit, commerce, and ads.

Profitability Profile and Margin Pressure

Operating income for Q2 stood at $825 million, up 14% year-on-year, although margins compressed by 2.1 percentage points due to higher marketing and shipping incentives. Net income reached $523 million, translating to diluted EPS of $10.31, missing consensus by $1.58. FX headwinds from the Argentine peso further pressured profitability. For the trailing twelve months, MELI delivered net income of $2.05 billion and diluted EPS of $40.58, with return on equity at a strong 43.8%. Despite short-term margin compression, operating leverage remains intact with projected operating income of $3.1–$3.3 billion over the next year.

Valuation Metrics Compared to Global Peers

At $2,420 per share, MELI trades at a trailing P/E of 58.6x and a forward P/E of 34.1x, with a PEG ratio of 1.10. On a cash flow basis, the stock looks more attractive, trading at 14.7x operating cash flow and 14.0x free cash flow, with a 7.1% FCF yield after growing operating cash flow 55% and free cash flow 45% year-on-year. Compared with Amazon’s long-term P/OCF range of 16–47 and Shopify’s historically higher multiples, MELI’s valuation appears reasonable. Analysts’ average price target is $2,893.88, with the high estimate at $3,500, implying 20%–45% upside from current levels.

Institutional Support and Insider Dynamics

Institutional ownership remains high at 84.8%, while insiders hold 7.3% of shares outstanding. The latest insider transactions can be tracked here. Short interest is low, at just 1.6% of float, signaling limited bearish positioning despite volatility. With daily trading volumes averaging 342,000 shares, liquidity remains ample for institutions, and recent inflows suggest continued support from long-term holders.

Risks to Monitor for MELI Stock

The greatest structural risks stem from macroeconomic instability in Argentina, Brazil, and Mexico. Currency devaluations have already cut into reported profits, and further peso weakness could weigh on EPS. Competition from Sea Limited (NYSE:SE), Amazon (NASDAQ:AMZN), and regional fintech startups adds pressure. Rising non-performing loans in credit services and stock-based compensation, which surged 63% year-on-year to $96 million in Q2, remain issues for shareholder dilution. Political instability across Latin America also adds volatility to MELI’s valuation.

Verdict on NASDAQ:MELI

MercadoLibre has cemented itself as Latin America’s dominant e-commerce and fintech platform, with revenues growing at 33–35% annually, fintech users exceeding 67 million, and operating leverage expanding despite temporary margin compression. At $2,420, valuation multiples are not cheap, but MELI’s unique ecosystem moat, profitability track record, and dual growth engines in commerce and fintech justify a premium. With analysts targeting $2,893–$3,500, and EPS expected to rise from $44 in 2025 to nearly $67 in 2026, the stock earns a Buy rating. Near-term risks remain tied to Argentina’s macro backdrop and margin pressure, but the structural growth trajectory makes MELI one of the strongest long-term compounding stories in emerging markets.

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