Investment Case Update: June 16, 2026
Price: $1,647.08 (6/16/26)
Market Capitalization: $84.9B
Enterprise Value: $91.6B
What the Company Does
MercadoLibre operates the largest e-commerce marketplace in Latin America connecting over 120 million active buyers across 18 countries in the region in 2025. About 90% of the gross merchandise value (GMV) sold on MELI’s commerce platform comes from third-party sellers, while MELI steps in to buy and re-sell the remaining 10% of GMV where there are gaps in sellers’ competitiveness. MELI’s logistics arm handles delivery of ~95% of marketplace items, with about half of those volumes stored and fulfilled through MELI-operated fulfillment centers, enabling 75% of orders to be delivered within 48 hours. MELI’s fintech platform capitalizes on the data-rich insights from MELI’s marketplace, offering consumers digital wallets, debit/credit cards, while also providing merchants with payment infrastructure, point-of-sale solutions, and working-capital financing. MELI’s advertising platform effectively monetizes merchants competing for the demand already created by MELI’s commerce platform. In 2025, ~53% of revenue came from Brazil, ~24% from Mexico, ~21% from Argentina, and ~4% from other countries.
Why We Own It
MELI serves as the de facto commerce and financial infrastructure provider for a region of >500MM people (~45% more than US) with GDP of $5.5T that has long lacked the banking access, credit infrastructure, and logistics reliability required for small and midsize businesses (SMBs) to scale efficiently. MELI has essentially transformed those structural bottlenecks into a self-reinforcing flywheel by embedding a fintech/payments platform to reduce friction and encourage repeat spending, extending credit to unlock liquidity for merchants and consumers, and building a scaled logistics network to ensure fast, reliable fulfillment. As a result, MELI is attractively positioned at the center of a massive and growing addressable market, with significant upside as ecommerce penetration rates in the region (~14%) are roughly half the levels of more developed countries (27%-32% in US/UK/China), creating a long runway for both volume growth and ecosystem monetization. MELI has posted revenue growth of at least 30% in 29 consecutive quarters, underpinned by a GMV compound annual growth rate of 26% since 2016, with strong growth in both active buyers and purchase frequency per user. MELI is also now the 3rd-largest digital advertiser in the region, holding a ~10% market share within a market that management expects to more than double between 2025 and 2029. Despite accelerating dominance and business diversification, MELI trades at a near all-time low forward (FY27) EV/Sales multiple of 1.8x.
How Management Allocates Capital
With a strong balance sheet, highlighted by a net leverage ratio (net debt divided by Adjusted EBITDA) of ~1.5x, and robust cash flow generation, MELI is deliberately reinvesting in logistics and its credit book to deepen its moat, temporarily suppressing margins despite clear fixed-cost leverage and high-margin advertising revenue growth which have pushed operating margins from 3% in 2020 to ~10% over the last 12 months. These very investments which detracted 5-6 percentage points from operating margins in 4Q25 are systematically removing friction to transact on MELI’s platform, which has historically accelerated GMV growth, expanded market share, and should ultimately translate into structurally stronger earnings power over time.
We originally posted our investment case for MELI on March 6, 2026.
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