MercadoLibre Inc.

MercadoLibre's credit portfolio reached $16.4 billion in the second quarter of 2026, marking 75% year-over-year growth, while assets under management rose 68% year over year to $23.2 billion. The company said ecosystemic users, defined as customers using both Marketplace and Mercado Pago, grew 37% year over year in the quarter, and users with a Mercado Pago credit card were two to three times more likely to remain ecosystemic than users without the card. Credit card issuance accelerated to 2.6 million new cards in the second quarter of 2026, up from 1.6 million in the year-ago period. MercadoLibre reported that 15-90-day non-performing loans stood at 7% for the total portfolio and 4.6% for credit cards, both near historical lows. The Zacks Consensus Estimate implies 44.6% year-over-year sales growth for the current fiscal year and a 0.7% decline in earnings per share, with next fiscal year estimates pointing to a 28.9% rise in sales and 43.3% growth in earnings.

Investor Michael Burry said he has increased short positions in Micron Technology, Nebius Group, Palantir Technologies and the iShares Semiconductor ETF, warning that the semiconductor and artificial intelligence boom may not be as durable as investors expect. In a Sept. 22 Substack post, Burry said he added to the bearish positions in some size, pointing to memory supply as a key part of his argument. He highlighted comments from Acer CEO Jason Chen, who challenged expectations for a prolonged shortage, saying some components including LPDDR5 and DDR5 9600 remain tight while DDR4 faces oversupply with more sellers than buyers. Burry said those comments align with his view that rising chip production could eventually pressure memory prices, which matters for Micron because the company has benefited from strong demand for memory used in AI infrastructure. He also added to positions in QXO, Build-A-Bear Workshop, Sprouts Farmers Market, Birkenstock and MercadoLibre, saying those stocks had corrected tremendously and appeared attractive, and criticized the Nasdaq-100 as historically overvalued and top-heavy. The next catalyst is Micron's upcoming results, which should provide a clearer read on memory pricing, demand and the pace at which new supply is entering the market.

MercadoLibre said its advertising business crossed a milestone in the second quarter of 2026, capturing more than 10% of Latin America's digital advertising market as advertising net revenues climbed 62% year over year on an FX-neutral basis. Growth broadened beyond the Self-Service channel, helped by improving momentum in cross-border trade and Top Brands, while shopping events such as Hot Sale and Cyber Day generated meaningful advertising demand. The company is leaning on artificial intelligence to make campaigns easier to run, with its AI Advisor analyzing campaigns in real time through WhatsApp and offering automated recommendations on budgets and return on ad spend; the tool has expanded from small pilots to tens of thousands of sellers per month, with one in three engaged sellers making campaign changes directly through the conversation, and adoption of its AI-powered budget orchestrator rose 63% sequentially in the quarter. Management said enhanced search technology is lifting click-through rates and revenues, and the company expanded video advertising inventory through an HBO Max integration, increasing its addressable video audience by roughly 50%. MercadoLibre, which competes with Amazon.com and Sea Limited, has seen its shares gain 14.9% over the past three months compared with the industry's 8.2% rise, and it carries a Zacks Rank #4 (Sell).

MercadoLibre's artificial intelligence investment grew roughly $80 million year over year in the second quarter of 2026, split between the cost of goods sold and Product Development, as management pointed to tangible returns from the technology. About 20,000 MercadoLibre developers are now using AI, with human-written code becoming the exception; code submissions increased 110% year over year, merged code more than doubled, and deployments rose nearly 75%, even as rollbacks declined. AI agents independently reviewed more than half a million code submissions and migrated roughly 9,000 services to newer platforms over the past year. The company completed the rollout of its AI-powered search architecture across its five largest sites, generating higher conversion and click-through rates that management said more than offset third-party LLM costs, while sellers representing almost half of GMV now use Seller Assistant and more than half of Help Portal requests are resolved without human intervention. Higher AI spending has not prevented operating efficiencies, with Product Development expenses falling to 7.2% of net revenues from 8.4% a year earlier and cost per token declining both sequentially and year over year. MercadoLibre, which competes with Amazon.com and Sea Limited, carries a Zacks Rank #3 (Hold), and the Zacks Consensus Estimate implies current financial-year sales growth of 44.6% with earnings per share down 0.7%, followed by a 28.9% rise in sales and 43.3% earnings growth next fiscal year.

Mercado Pago, the fintech arm of MercadoLibre, is pressing ahead with credit card expansion even as Brazil's central bank warns about rising household debt, Reuters reported. Speaking on the sidelines of a financial industry event in Brasilia, Mercado Pago Vice President Ignacio Estivariz said the company's underwriting models remain robust and its loan portfolio healthy, adding that the firm has no problem slowing down at the right moment and constantly monitors portfolio health to set its pace of growth. The company issued 2.6 million credit cards in the second quarter, up from 1.6 million a year earlier, in the exact segments Brazilian policymakers are watching most closely, credit card balances and unsecured consumer loans. Mercado Pago now generates roughly 40% of MercadoLibre's total revenue, and analysts project the fintech segment to reach about $18.1 billion in 2026 revenue, up nearly 44% year over year. Its credit portfolio reached $11 billion by the third quarter of 2025, up 83% year over year, with credit cards accounting for 44% of the book.

Mercado Libre has successfully issued 2036 senior unsecured notes totaling USD 1,000 million. The 10-year notes carry a 5.850% coupon and drew strong demand from more than one hundred institutional investors. Chief Financial Officer Martín de los Santos said the new 10-year note priced at the same spread as the company's previous 7-year issuance despite the longer tenor, calling it another step in Mercado Libre's consolidation as a full investment grade issuer in the international capital markets. Proceeds will be used for general corporate purposes and will further strengthen the company's liquidity. The transaction was led by BofA Securities, Citigroup, Goldman Sachs & Co. LLC, J.P. Morgan and Morgan Stanley as Global Coordinators and Lead Book-Running Managers, with Allen & Company and Santander as Joint Book-Running Managers.

MercadoLibre's decision to lower its free-shipping threshold in Brazil has driven sustained growth, with items sold in the country rising 56% year over year in the second quarter of 2026, up from 26% a year earlier, and FX-neutral GMV increasing 39%. The company added nearly 19 million unique active buyers globally, with Brazil leading the growth, and conversion rates expanded by 1.1 percentage points year over year. Items sold per unique active buyer in Brazil climbed 19%, and the share of Brazilian buyers purchasing across three or more categories monthly rose by 10 percentage points. MercadoLibre, which competes with Amazon and Sea Limited, has seen its shares gain 13.6% over the past three months, and its forward P/E of 39.02 is above the industry average of 22.13. The Zacks Consensus Estimate for current-year sales implies 44.6% growth, while EPS estimates have been revised downward over the past 30 days.

MercadoLibre's Brazil business remained a standout in the second quarter of 2026, with marketplace growth holding at a high level even as the company began lapping last year's reduction in its free-shipping threshold. Gross merchandise volume in Brazil increased 39% year over year on an FX-neutral basis, slightly ahead of the 38% growth recorded in the first quarter of 2026 and substantially ahead of the 29% growth registered in the second quarter last year. Items sold jumped 56% compared with 26% growth a year earlier, while items sold per unique active buyer rose 19% and conversion improved 1.1 percentage points. Daily active users have continued to grow faster than monthly active users in every quarter since MercadoLibre lowered its free-shipping threshold in June 2025, and the share of users purchasing three or more categories per month has increased by 10 percentage points since the change. Ecosystemic user growth in Brazil accelerated to almost 50% year over year in the quarter, up from 35% before the shipping-threshold change, and active sellers grew 29% year over year. The Zacks Consensus Estimate for MercadoLibre's current financial-year sales implies year-over-year growth of 44.6%, while the consensus estimate for earnings per share suggests a decline of 0.7%; for the next fiscal year, the consensus estimate indicates a 28.9% rise in sales and 43.3% growth in earnings.

MercadoLibre reported second-quarter revenue of $10.17 billion, a 49.8% year-on-year increase that exceeded analyst expectations of $9.73 billion. Adjusted earnings per share came in at $9.19, slightly above the $9.11 consensus, while adjusted EBITDA of $975 million beat estimates by 6.3%. Operating margin fell to 6.7% from 12.2% a year earlier, which management attributed to strategic investments in customer engagement, expanded credit offerings, and technology including artificial intelligence. The company's credit book grew 75% year-on-year to $16.4 billion, and unique active buyers rose by 18 million to 89 million. CEO Ariel Szarfsztejn highlighted AI as accelerating the secular shift the company is trying to capture, while CFO Martin de los Santos emphasized disciplined investment prioritizing long-term growth over near-term profitability.

Airbnb and MercadoLibre each reported strong second-quarter fiscal 2026 results, with Airbnb beating revenue estimates by $100 million on $3.6 billion in sales and MercadoLibre surpassing $10 billion in quarterly net revenue for the first time. Airbnb's revenue rose 17% year-over-year, driven by a strong increase in nights booked and exceptional growth in foreign markets like India and Latin America, while management guided for full-year sales of $14.1 billion and net income of $3.2 billion. MercadoLibre's net revenue grew 50% year-on-year, though operating margin was 6.7% and faces compression from higher energy costs tied to the Iran war; analyst consensus calls for full-year 2026 revenue around $41 billion and net income of $2.1 billion. The analysis notes that choosing between Airbnb and MercadoLibre requires balancing a global travel platform against a Latin American commerce and fintech ecosystem, and concludes that long-term investors should lean toward MercadoLibre, which it describes as the Amazon of Latin America and trades at a reasonable price-to-sales ratio.

Warren Buffett's successor Greg Abel could decide to buy MercadoLibre for Berkshire Hathaway's portfolio, more than seven years after Buffett first considered a similar investment in Amazon. MercadoLibre offers e-commerce and fintech businesses like Amazon but spent only about $1.3 billion in capital expenditures over the trailing 12 months, more than 99% less than Amazon's nearly $152 billion. The company's first-quarter 2026 revenue grew 49% year over year to $8.8 billion, though net income fell 16% to $417 million as it sacrificed short-term profitability to build market share. Berkshire has prior experience in Latin American fintech through early investments in StoneCo and Nu Holdings, which could help it understand MercadoLibre's fast-growing Mercado Pago unit. MercadoLibre stock trades at a 29% discount to its mid-2025 peak and at about 49 times earnings, which is below the roughly 80 times earnings Berkshire likely paid for Amazon in early 2019.

MercadoLibre's revenue jumped 49% last quarter to $8.8 billion, its fastest growth rate in four years, ahead of its Aug. 5 earnings report. The Brazilian market saw a 56% increase while unit shipping costs dropped 17% year over year, reflecting improved infrastructure and logistics. Despite the strong top-line performance, the stock has fallen more than 20% over the past 12 months as investors reacted to a temporary dip in operating margin from reinvestment in growth. The company currently trades at less than 3 times sales with a PEG ratio of 1.15, suggesting it may be fairly priced or slightly undervalued.

MercadoLibre stock has fallen 31% from its peak, but the Latin American e-commerce and fintech leader is investing heavily in logistics infrastructure to support rapid growth, which could lead to market-beating returns over the next five years. The number of unique active buyers grew 26% year over year in the first quarter, gross merchandise volume increased 36%, and items sold rose 47%, while unit shipping costs declined 17% in local currency. Despite a profit margin that fell from 8.3% to 4.7%, analysts expect earnings to grow at an annualized rate of 29%, potentially doubling the stock's value in five years. E-commerce penetration in key markets like Argentina, Brazil, and Mexico remains below 10%, and the company's fintech arm has issued 2.7 million credit cards, creating a powerful growth flywheel.

Scotiabank analyst Hector Maya maintains a Sector Outperform rating and a Street-high $2,800 price target on MercadoLibre, implying roughly 55% upside from the current $1,799.21, even after a severe first-quarter margin collapse. Revenue rose 49% year-over-year to $8.85 billion, beating consensus, but operating income fell 20% to $611 million as provisions for doubtful accounts more than doubled to $1.244 billion and adjusted free cash flow turned negative. The company extended average Brazilian loan terms from five to eight months and pushed into riskier borrower segments, triggering a 15.8% share drop in the first week after the report. Despite the sell-off, 20 of 24 analysts still rate the stock a Buy, with bulls arguing the margin reset is a deliberate investment cycle that will reverse as newer credit card cohorts season and shipping subsidies stabilize. MercadoLibre shares are down 10.68% year to date, trailing the S&P 500 by more than 20 percentage points, while peers Sea and Nu Holdings have also fallen on similar credit-provision concerns.

MercadoLibre's managed fulfillment network handled 55% of total shipments in the first quarter of 2026, as the company deepens its logistics infrastructure to strengthen its competitive position in Latin America. The network has expanded to more than 50 facilities, with same- and next-day shipments climbing 39% year over year to 199 million, while overall managed network penetration reached 95.5%. Management highlighted a 17% year-over-year reduction in shipping costs in Brazil in local currency, driven by better facility utilization, route optimization, and greater use of its slow-shipping network. The company views fulfillment as a structural advantage that strengthens buyer retention and expands e-commerce adoption across the region.

MercadoLibre stock could soar over the next five years if the company returns to robust profit growth. The Latin American e-commerce and fintech giant saw revenue jump 49% to over $8.8 billion in the first quarter of 2026, but net income fell 16% to $417 million as rising competition squeezed retail margins and a 106% year-over-year increase in provisions for doubtful accounts weighed on its fintech unit. To counter these pressures, MercadoLibre is aiming to boost sales volumes and is using AI to reduce bad loans by better rating borrowers and limiting loan amounts. Its current price-to-earnings ratio of 49, while above the S&P 500 average, is lower than Amazon's multiple during its high-growth years, and rising profits could compress that multiple further, potentially driving the stock higher from its current 30% discount to its 52-week high.

MercadoLibre reported robust fintech performance in the first quarter of 2026, with monthly active users climbing 29% year-over-year to 83 million and assets under management surging 77% to nearly $20 billion. The company's credit portfolio expanded 87% to $14.6 billion, marking its largest quarterly increase in nominal terms. Citi maintained a Hold rating on the stock with a $1,950 price target, noting solid credit performance with no signs of weakening. Growth accelerated in Brazil and Mexico, while new customers showed record retention and engagement levels.

MercadoLibre shares have fallen 22% over the past year amid rising competition and disappointing profits, but there are three reasons the stock could bounce back. First, the company is deliberately investing heavily in initiatives like lowering free shipping thresholds and expanding its credit card business, which are pressuring margins now but could pay off long-term in underbanked Latin American markets. Second, MercadoLibre retains a wide competitive moat through network effects, high switching costs for merchants, and a large logistics network that is difficult to replicate. Third, fast-growing, high-margin opportunities such as advertising, where revenue surged 63% year over year in the first quarter, could significantly improve financial results over time.

MercadoLibre is on track to join Amazon, Walmart, and Costco in the $50 billion revenue club by 2027. The Latin American e-commerce and fintech giant reported a 49% year-over-year revenue increase in the first quarter of 2026, with gross merchandise volume up 42% and total payment volume up 41%. Trailing-12-month revenue currently stands at $31.8 billion, and sustaining a 45% compound annual growth rate would push it past $50 billion before the end of 2027. Growth is fueled by underpenetrated e-commerce and fintech markets in Latin America, with Brazil seeing a 32% jump in unique active buyers after MercadoLibre lowered its free shipping threshold. The stock trades at a price-to-earnings ratio of 49, near a 10-year low.

Broadcom, MercadoLibre, and Micron Technology are highlighted as growth stocks with reasonable valuations for long-term investors. Broadcom, a semiconductor and software giant with a $1.9 trillion market value, trades at a forward price-to-earnings ratio of 19.8, below its five-year average of 20.7, and saw second-quarter revenue jump 48% year over year, with AI semiconductor revenue surging 143%. MercadoLibre, a Latin American e-commerce and fintech company, has a price-to-sales ratio of 2.9, well under its five-year average of 5.3, and reported first-quarter revenue up 49% and total payment volume up 50%. Micron Technology, a memory chip specialist, carries a forward P/E of 6.1 and posted third-quarter revenue growth of 345% and net income up about 1,400%, driven by AI demand.

MercadoLibre and Axon Enterprise are both trading about 33% below their recent highs, presenting potential long-term opportunities. MercadoLibre, the leading e-commerce and fintech platform in Latin America, reported a 42% year-over-year revenue increase in the first quarter, with unique active buyers growing 26% to 84 million. Axon Enterprise, a leader in public safety technology, saw demand for its AI tools more than double last year, generating over $750 million in bookings, as it shifts to a software-first model. Both companies are expected to grow earnings at annualized rates of 31% and 29%, respectively, over the next several years, supporting their premium forward P/E multiples of 44 and 79.

MercadoLibre and Walmart have both seen their stock prices decline this year despite strong financial results, as market worries over tariffs and inflation overshadow their fundamentals. Walmart's first-quarter fiscal 2027 revenue grew more than 7% year over year, with its global advertising business up 37% and e-commerce up 26%, though it reported negative free cash flow of $1.9 billion due to investments in automation and technology. MercadoLibre's revenue skyrocketed 49% year over year in its fiscal 2026 first quarter, but operating margins fell as it invested heavily in logistics, with its fintech arm Mercado Pago's credit portfolio reaching $14.6 billion, an 87% increase, and assets under management hitting $20 billion, a 77% jump. The article suggests that for long-term growth, MercadoLibre is the clear winner due to its rapid expansion in Latin American e-commerce and fintech, while Walmart is a more reliable and steady bet.

MercadoLibre stock has fallen 35% from its high, and the article argues it could be a better buy than SpaceX or any Magnificent Seven stock. The Latin American e-commerce and fintech leader reported 49% revenue growth in the first quarter, with 126 million unique active users, but operating income dropped from $763 million to $611 million year over year as margins compressed from 12.9% to 6.9% due to investment spending. The company sees massive runway given Latin America's e-commerce penetration of 14% versus 27% in the U.S. and 33% in China, and its fintech arm claims to be the largest digital bank in the region with 83 million monthly active users. At 45 times trailing earnings, the valuation is near a 10-year low, and with second-quarter earnings due August 5, July is viewed as an auspicious time to buy.

The Motley Fool highlights Axon Enterprise, Dutch Bros, and MercadoLibre as three magnificent growth stocks to buy in July. Axon's AI-driven law enforcement platform saw 34% revenue growth in the first quarter, with SaaS revenue up 35% and adjusted earnings per share rising to $1.61. Dutch Bros plans to nearly double its store count to 2,029 by 2029, with first-quarter sales growth accelerating to 31% and same-store sales up 8.4%. MercadoLibre reported 49% revenue growth in the first quarter, driven by a 42% increase in gross merchandise volume and a 50% rise in total payment volume, as it leverages AI to expand in underpenetrated Latin American markets.

Bank of America Securities reaffirmed its Buy rating on MercadoLibre, citing significant long-term returns from the company's credit card operations. In the first quarter of 2026, MercadoLibre more than doubled its credit card portfolio year-over-year to $6.6 billion, representing about 45% of its total loan book, while credit card monthly active users surged 68%. Analyst Robert E. Ford Aguilar noted that despite this rapid growth, MercadoLibre held only 3.4% of industry credit card balances in Brazil and 2.5% in Mexico as of March 2026. The credit card segment is expected to approach breakeven in 2028 after an estimated EBIT loss of $443 million in 2026, which would be a 1.1 percentage-point drag on consolidated margin.

MercadoLibre is the top pick for a $1,000 investment in July, according to a Motley Fool analysis, despite a 35% drop from its all-time high. The company reported a 49% year-over-year revenue increase in the first quarter of 2026, but profits were pressured by a 106% rise in doubtful-account expenses and e-commerce competition. Its price-to-earnings ratio stands at 45, which the analysis considers reasonable given Amazon's historical multiples above 50 during its growth years. The article highlights MercadoLibre's history of turning challenges into advantages through units like Mercado Pago and Mercado Envios, and suggests that overcoming current headwinds could drive the stock to new highs.

MercadoLibre is seeing faster growth in Brazil, with FX neutral gross merchandise volume up 38% and items sold rising 56%, while unit shipping costs fell 17%. The company views Brazil as a key growth catalyst amid intense competition in Latin American e-commerce and fintech. Improved operating efficiencies in Brazilian logistics and fulfillment are supporting broader company-wide performance. The gains suggest the platform can handle heavier usage without proportionally higher costs, potentially strengthening profitability and freeing capital for reinvestment in other markets.