MercadoLibre, Inc. (MELI): A Bull Case Theory

We came across a bullish thesis on MercadoLibre, Inc. on X.com by DividendNGrowth. In this article, we will summarize the bulls’ thesis on MELI. MercadoLibre, Inc.'s share was trading at $2,187.57 as of October 7th. MELI’s trailing and forward P/E were 55.49 and 32.26 respectively according to Yahoo Finance.

MercadoLibre (MELI) stands as the dominant e-commerce and fintech powerhouse in Latin America, operating a highly integrated ecosystem that spans marketplace operations, payments (Mercado Pago), logistics (Mercado Envíos), and lending (Mercado Crédito). Each business leverages shared data, technology, and customer relationships to reinforce the platform’s network effects, creating a self-reinforcing flywheel. Sellers on the marketplace seamlessly process payments through Mercado Pago, while Mercado Envíos uses transactional and marketplace data to optimize delivery routes, reducing costs and improving speed.

Mercado Crédito extends loans to both buyers and sellers based on their platform activity, lowering credit risk and encouraging greater transaction volumes. This interconnected system accelerates growth, as more buyers attract more sellers, which in turn drives higher payments and deliveries, generating richer data to support lending and further sales.

The result is a high-quality, capital-efficient business model with strong competitive moats, enabling MercadoLibre to continuously reinvest in its platform and operations to drive long-term compounding growth. The combination of marketplace dominance, fintech integration, and data-driven operations positions the company to capture multiple layers of revenue while maintaining resilient unit economics, reinforcing its status as a leading compounder in Latin America.

For investors, the platform’s self-reinforcing flywheel, diverse revenue streams, and disciplined reinvestment strategy provide a compelling long-term growth story, underpinned by structural tailwinds in e-commerce, digital payments, and online lending across the region. MercadoLibre exemplifies a business where each component strengthens the others, creating a virtuous cycle that is difficult for competitors to replicate and offering significant upside potential over the long term.

Previously we covered a bullish thesis on MercadoLibre, Inc. (MELI) by Daan | InvestInsights in May 2025, which highlighted its leadership in Latin America’s e-commerce and FinTech sectors, strong user growth, and profitable scale. The company's stock price has depreciated approximately by 15.37% since our coverage due to market volatility. The thesis still stands as MELI expands its ecosystem. DividendNGrowth shares a similar perspective but emphasizes the self-reinforcing flywheel of marketplace, payments, logistics, and lending.

MercadoLibre, Inc. is on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 116 hedge fund portfolios held MELI at the end of the second quarter which was 108 in the previous quarter. While we acknowledge the potential of MELI as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.