How's MELI Using Argentina's Economic Recovery to Fuel its Growth?

MercadoLibre MELI is leaning into Argentina’s economic revival with growing confidence. The country is showing clear signs of stabilization, with analysts projecting strong GDP growth in 2025 and 2026 as reforms begin to take hold. Inflation is declining, capital controls have been lifted, and the investment climate is improving. Against this backdrop, MercadoLibre has expressed optimism, eyeing long-term growth in the country.

MercadoLibre is strategically expanding its cross-border trade and optimizing its marketplace operations in Argentina, leveraging recent regulatory changes and focusing on key growth areas. MercadoLibre is increasing its focus on the supermarket category within its local marketplace, aiming to increase the share of first-party products offered. The company is also prioritizing affordability of products in the supermarket category, recognizing its importance in the Argentine market.

To offer more products and improve user experience in Argentina, MELI’s financial arm, Mercado Pago, announced that it will apply for a banking license from the Central Bank to build the largest digital bank in the country. This marks a key step as Argentina’s banking industry is undergoing a digital shift, and MELI aims to capture this opportunity with its quality services. MELI also plans to start issuing credit cards in the country in the second half of the year. 

Argentina’s revenues grew from $615 million (14.2% of total revenues) in the first quarter of 2024 to $1.38 billion (23.3% of total revenues) in the first quarter of 2025, more than doubling year over year. This turnaround followed a weak 2024 marked by high inflation and currency devaluation. In 2025, macro stabilization enabled MercadoLibre to take advantage of its ecosystem strength. The Zacks Consensus Estimate for second-quarter 2025 Argentina revenues is pegged at $1.46 billion.

MELI’s Competition in the Argentine Market

Argentina is both the birthplace and stronghold of MercadoLibre, yet there are other companies, such as Amazon AMZN and DLocal DLO, which are challenging MELI in the country.

Amazon started offering $5 flat-rate international shipping to Argentina. Soon after, it made the shipping free, clearly signaling its intent to grow in Argentina by making U.S. products more accessible to local consumers.

DLocal has announced plans to invest up to $100 million in Argentina and expand its workforce significantly. DLocal is working with Argentine authorities to strengthen its local footprint and drive long-term fintech growth in the country.

MELI’s Share Price Performance, Valuation and Estimates

MELI shares have gained 40.8% in the year-to-date (YTD) period, outperforming the Zacks Internet – Commerce industry and the Zacks Retail-Wholesale sector’s growth of 10.9% and 6.7%, respectively.

MELI’s YTD Price Performance

From a valuation standpoint, MELI stock is currently trading at a forward 12-month Price/Sales ratio of 3.87X compared with the industry’s 2.17X. MELI has a Value Score of D.

MELI’s Valuation

The Zacks Consensus Estimate for second-quarter 2025 earnings is pegged at $12.01 per share, which has remained unchanged over the past 60 days, indicating 14.60% year-over-year growth.

MercadoLibre, Inc. Price and Consensus

MercadoLibre, Inc. price-consensus-chart | MercadoLibre, Inc. Quote

MercadoLibre currently carries a Zacks Rank #4 (Sell). 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research