MELI vs. EBAY: Which Online Marketplace Stock Is the Better Pick?

MercadoLibre MELI and eBay EBAY are household names in online marketplaces, linking millions of buyers and sellers through digital platforms. MercadoLibre dominates Latin America with a combined commerce, payments and logistics model. eBay runs a leaner global platform spanning over 190 markets, with an emphasis on collectibles, luxury goods and auto parts.

As both companies navigate shifting consumer habits and competitive pressures, the central question becomes which marketplace is positioned to deliver stronger value over the long run. Let’s delve deeper to find out.

The Case for MELI

MercadoLibre has expanded into a broad commerce and payments ecosystem across Latin America, combining marketplace services with Mercado Pago, a fast-growing credit portfolio, advertising and logistics that now handles more than 50% of shipments. This integrated approach has supported scale, but it has also raised the cost of sustaining growth.

Competition is intensifying in core markets. TikTok Shop and Shopee are gaining traction in Brazil, while Amazon is allocating more resources across the region. In response, MercadoLibre lowered its free shipping threshold, cut seller fees, and stepped up promotions during the second quarter. These moves supported transaction volumes but pushed operating margin down 210 basis points year over year to 12.2%. Marketing costs rose nearly 50%, highlighting how expansion is being maintained through incentives rather than efficiency.

Mercado Pago is growing rapidly, but adding risk. The credit portfolio rose 91% year over year to $9.3 billion, with credit cards now close to half of balances. Delinquencies improved slightly, yet provisions increased and foreign exchange losses doubled to $117 million. This mix of aggressive lending and volatile currencies leaves earnings vulnerable to disruption.

Regional GMV growth of more than 30% in Brazil and Mexico and over 70% in Argentina demonstrates demand. However, that momentum continues to depend on costly subsidies and logistics expansion, suggesting that pressure on profitability and cash flow is not temporary but an ongoing feature of the business.

The Zacks Consensus Estimate for MELI’s third-quarter 2025 earnings is pegged at $9.88 per share, unchanged over the past 30 days. The figure indicates a 26.18% increase year over year.

MercadoLibre, Inc. Price and Consensus

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

The Case for EBAY

eBay runs a transaction-based marketplace that connects buyers and sellers without owning inventory or fulfillment assets. Monetization depends on take rates, advertising and payment services. This model lowers capital intensity and allows consistent margin delivery, but it leaves the platform more reliant on buyer activity and less differentiated on logistics compared with peers that control the end-to-end experience.

In the second quarter of 2025, revenues rose 6% year over year to $2.7 billion, supported by Gross Merchandise Volume (GMV) growth of 6% to $19.5 billion. Operating margin expanded 50 basis points to 28.4%, supported by efficiency initiatives. Advertising revenue reached $482 million, up 19% year over year, representing 2.5% of GMV. Deeper adoption of promoted listings shows progress, though underlying GMV growth remains modest relative to the wider e-commerce industry.

eBay has introduced initiatives to support engagement. AI-driven tools are being used to improve listings and recommendations, livestream commerce via eBay Live is expanding in the U.K. and the United States, and the Klarna partnership is widening payment options for buyers. These moves highlight adaptation, but their impact on driving buyer growth or lifting transaction volumes has so far been limited.

Although eBay’s business appears steadier compared with MercadoLibre, it faces its own set of challenges. GMV growth remains modest, category focus is weighted toward mature segments, and larger rivals continue to invest heavily in logistics and customer experience. While margins and advertising provide resilience, these factors limit the scope for acceleration, leaving eBay positioned more as a stable operator than a growth leader in global e-commerce.

The Zacks Consensus Estimate for eBay’s third-quarter 2025 earnings is pegged at $1.33 per share, unchanged over the past 30 days. The figure indicates an 11.76% increase year over year.

eBay Inc. Price and Consensus

eBay Inc. price-consensus-chart | eBay Inc. Quote

Price Performance and Valuation of MELI and EBAY

In the year-to-date (YTD) period, EBAY shares have rallied 43.4%, while MELI shares have increased 40.6%. Both have outperformed the Zacks Internet-Commerce industry’s appreciation of 14.1%. EBAY’s rally has been supported by its global exposure and stable execution, whereas MELI’s share gains mask the strain of rising costs and intensifying competition.

EBAY Outperforms MELI, Industry in YTD

Valuation-wise, both MELI and EBAY’s shares appear stretched as suggested by a Value Score of D. MELI trades at 3.67x forward 12-month Price/Sales, a premium that looks difficult to justify given margin compression, rising credit exposure and ongoing cost pressures. EBAY trades at 3.62x forward 12-month Price/Sales, which is more defensible in light of its global exposure, stable margins and growing advertising revenues.

Price/Sales (F12M)

Conclusion

eBay stands out with global exposure, stable margins, and growing advertising revenues. Its stronger share price rally reflects investor confidence in this model and the valuation is supported by these steady fundamentals. MercadoLibre, on the other hand, continues to grapple with competitive intensity, margin pressure, and rising credit risk, with stretched valuations reinforcing caution. Considering these factors, eBay’s Zacks Rank #3 (Hold) positions it more favorably than MercadoLibre’s Zacks Rank #4 (Sell).

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

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

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