We just covered Avoid SpaceX and Buy These 11 Stocks Instead. Mercado Libre (NASDAQ:MELI) ranks #7 (see Avoid SpaceX and Buy These 5 Stocks Instead).
Number of Hedge Fund Investors: 102
Mercado Libre (NASDAQ:MELI) stock tanked 11 percent this year. Reddit’s been all over it, saying this is the real play instead of buying into the SpaceX IPO craze. The company owns the biggest marketplace and payment system across Latin America. They’ve got Brazil, Mexico, and a bunch of other countries locked down.
The stock looks expensive at first glance with a PE of 28x to 40x. But the growth doesn’t match that valuation. The price-to-growth ratio is 1.25 while the sector average is 1.40. So it’s actually trading cheaper than its peers relative to how fast it’s growing.
Q1 2026 was solid. Revenue grew 49 percent year-over-year. Brazil was crushing it with 54 percent growth. They hit 84 million active users on the marketplace up 26 percent. The payment side had 82.9 million monthly users, up 29 percent. Assets under management hit almost $20 billion, up from $11 billion a year ago.
But Mercado Libre’s (NASDAQ:MELI) profitability fell in Q1 amid huge investments in Brazil and rising oil prices due to the Middle East conflict. But bulls say the company has secular growth catalysts for the long term. Digital payments market was $114 billion in 2024 and hits $361 billion by 2030. That’s a 21% CAGR. E-commerce in Latin America gets to $261 billion by 2028. If they get margins back to 10-12% like before, the stock could hit $2,691 a share. That’s 61% up from June 2026.
Bell Global Equities Fund stated the following regarding MercadoLibre, Inc. (NASDAQ:MELI) in its Q1 2026 investor letter:
“A holding was also established in MercadoLibre, Inc. (NASDAQ:MELI), the “Amazon of Latin America”. MercadoLibre is a vast enterprise, shipping over US$85bn (3bn items) worth of goods each year to over 120 million customers. Both volumes and revenues have increased tenfold over the past six years, while the income statement and cash flow inflected into sustained profitability. We have long admired this company and its excellent founder-led management team, but the shares only occasionally provide an opportune window to enter a position. We had watched … (Click Here to Read the Letter in Detail).”
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