MercadoLibre, Inc. (MELI): A Bull Case Idea
We got here throughout a bullish thesis on MercadoLibre, Inc. on Compounding Your Wealth’s Substack by Sergey. On this article, we are going to summarize the bulls’ thesis on MELI. MercadoLibre, Inc.’s share was buying and selling at $2,373.89 as of July 31st. MELI’s trailing and ahead P/E have been 58.40 and 45.87, respectively in keeping with Yahoo Finance.
A buyer utilizing their telephone to entry an internet commerce platform.
MercadoLibre (MELI) stands as Latin America’s dominant e-commerce and fintech platform, delivering 37% year-over-year income development to $5.9 billion in Q1 2025, with $494 million in web revenue. Its deeply built-in ecosystem—spanning e-commerce, digital funds, logistics, and credit score—creates highly effective community results throughout 18 international locations. With 66.6 million distinctive market consumers and 64 million month-to-month fintech customers, MELI processes $58 billion in TPV and shipped over 1.2 billion gadgets in 2024, underscoring its scale benefit.
Its dual-segment construction—Commerce (56% of income) and Fintech (44%)—continues to ship robust development, with the Fintech section outpacing general income. The Commerce section noticed 32% YoY development, whereas GMV rose 17% YoY and the take charge improved to 25%, signaling rising monetization. In the meantime, Fintech income grew 43% YoY, supported by sturdy consumer development and secure take charges. MELI’s proprietary logistics community and MELI Air reinforce its moat, alongside robust model fairness—ranked fiftieth globally with a $49.8B model worth.
Its credit score portfolio grew 75% YoY to $7.8 billion, with secure NPL tendencies, and selective tightening towards higher-quality debtors. Argentina’s resurgence, now contributing 23% of income with 125% YoY development, affirms MELI’s strategic pivot towards the area. Regardless of macro dangers, MELI’s working margins expanded and its steadiness sheet stays strong, with $9.6B in money exceeding whole debt. Inventory-based compensation is simply 2% of income, and dilution is minimal. Buying and selling at a Ahead EV/Gross sales of 4.3 and a PEG ratio of roughly 1, MELI seems undervalued relative to its 30%+ development. The synergy between fintech and commerce, coupled with scale, model, and community benefits, positions MELI as a high-conviction long-term compounder.
Beforehand, we lined a bullish thesis on MercadoLibre, Inc. (MELI) by Daan | InvestInsights in Could 2025, which highlighted its robust e-commerce and fintech development in Latin America. The inventory has depreciated by ~8% since our protection, because the valuation has compressed. The thesis nonetheless stands. Sergey shares an analogous view however emphasizes its section margins and valuation-driven upside.
