MercadoLibre (NASDAQ:MELI) has established itself as the dominant force in Latin American digital commerce and financial services.
As traditional financial institutions struggle to reach Latin America’s large unbanked population and global e-commerce giants focus on developed markets, MercadoLibre has built an ecosystem that addresses the unique needs of over 218 million active users across 18 countries.
MELI stock has returned over 1,600% to shareholders in the last decade, yielding an annual return of over 32%. The company also scores remarkably high on overall environmental and social impact. Let’s see if the tech stock fits the bill of making money and doing good.
The Bull Case for MercadoLibre Stock
The investment thesis for MELI stock centers on its unassailable position in Latin America’s rapidly expanding digital economy. With brand preference metrics reaching all-time highs in Brazil, Mexico, Argentina, and Chile during Q1, MercadoLibre has demonstrated its ability to consolidate market leadership while expanding into adjacent services.
Its dual-engine growth model creates multiple avenues for expansion. The e-commerce platform benefits from ongoing digital transformation across Latin America, where e-commerce penetration remains below 15%.
Simultaneously, its fintech arm, Mercado Pago, is capitalizing on the region’s massive financial inclusion opportunity, with monthly active users growing over 30% year-over-year to reach 64 million users.
MercadoLibre’s strategy of building an integrated ecosystem—combining marketplace, payments, logistics, advertising, and credit services—creates powerful network effects that become stronger with each new user.
This flywheel effect makes it difficult for competitors to gain market share, as evidenced by the company’s ability to maintain and expand its leadership position despite increased competition.
The focus on financial inclusion presents a compelling opportunity. With over half of Latin Americans lacking access to traditional banking services, Mercado Pago’s suite of products, including yielding accounts, credit cards, investments, and insurance, addresses a massive underserved market while generating significant cross-selling opportunities within the MercadoLibre ecosystem.
Strong Performance in Q1 for MELI Stock
In Q1, MercadoLibre delivered exceptional results that exceeded expectations across key metrics. It reported net revenue growth of 37% year-over-year, demonstrating its ability to navigate a challenging macroeconomic environment.
Argentina’s turnaround was a key highlight, with U.S. dollar revenues more than doubling year-over-year, as the country’s economic stabilization enabled MercadoLibre to leverage its strong brand position fully. This performance underscores an ability to benefit from improving conditions across its diverse geographic footprint.
The e-commerce segment demonstrated robust growth, with a 25% increase in active users, the strongest growth in four years, and a 28% increase in items sold. This performance was supported by ongoing investments in logistics and fulfillment, evidenced by a 25% improvement in same-day and next-day shipping capabilities.
Mercado Pago’s fintech business continued its impressive trajectory with a 31% increase in monthly active users and 43% growth in segment revenue. The credit portfolio expanded by 75% while maintaining healthy delinquency levels, with credit card first payment defaults reaching an all-time low in Brazil, indicating improved underwriting capabilities.
A High Impact Score Makes MELI Stock a Truly Good Buy
MercadoLibre scores highly on impact with an overall impact score of 76 by ACA Global/Ethos ESG. The company scores particularly high on financial inclusion (96). It supports 1.8 million families that rely on its platform for income, with 75% of these being family businesses.
Environmentally, MELI has expanded its electric vehicle fleet fourfold, sources 44% of its energy from renewables, uses 50% recycled plastic in shipping, and has invested $23.7 million in conservation projects.
MELI is also rated very highly as an employer scoring 96 in the category decent, safe work opportunities.
A Strong Financial Position and Outlook
Looking ahead, MercadoLibre is well-positioned to capitalize on structural tailwinds driving long-term growth across Latin America. The region’s ongoing digital transformation, rising internet penetration, and increasing smartphone adoption continue to expand the addressable market for both e-commerce and fintech services.
The company’s investments in logistics infrastructure, technology platforms, and credit capabilities position it to capture an increasing share of this growing market. Management’s focus on building sustainable competitive advantages through network effects, scale economies, and switching costs should help defend and expand market position over time.
Analysts tracking MercadoLibre stock expect continued strong growth, with diversified revenue streams and an expanding ecosystem providing multiple drivers for value creation. The combination of organic growth opportunities and potential for margin expansion as the business scales suggests upside potential for long-term investors.
What is the Average MELI Stock Price Target?
Analysts tracking MELI stock expect sales to rise from $20.78 billion in 2024 to $53.3 billion in 2029, indicating a compounded annual growth rate of 31%. During this period, adjusted earnings are forecast to increase from $37.69 per share to $147 per share, representing an annual growth rate of 291%.
While the e-commerce stock continues to grow at an enviable pace, investors are worried about its lofty multiple. MELI stock currently trades at a forward price-to-earnings multiple of 47x, compared to its 3-year average of 58x.
If the NASDAQ-listed tech stock is priced at 40x forward earnings (1.3x its earnings growth), it should trade around $5,880 in early 2029, indicating an upside potential of 132% from current levels.
As we can see above, MercadoLibre stock has a Ziggma score of 97 but is rated relatively low in valuation. Alternatively, strong revenue growth and an expanding addressable market make the tech stock attractive to investors in June 2025.
Out of the 26 analysts tracking MercadoLibre stock, 21 recommend “Buy”, three recommend “Hold”, and two recommend “Sell”. The average MELI stock price target is $2,766.9,1, which is 9% higher than the current target price.
FAQs
Is MELI stock a good buy now?
According to consensus estimates, MELI stock trades at a 9.4% discount in June 2025.
What is the market cap of MELI stock?
MELI stock is valued at a market cap of $128 billion.
Does MELI pay a dividend?
No, MELI stock does not pay shareholders a dividend.
Where will MELI stock be in 5 years?
If it trades at a similar multiple, MELI stock could trade at more than $6,000 per share in June 2030.
What is the MELI stock price today?
MELI stock is currently trading at approximately $2,528.