MercadoLibre's Logistics Scale Expands: A Margin Tailwind Ahead?

MercadoLibre’s MELI expanding logistics network is transitioning from a cost burden into an operating leverage driver. As order density rises, shipping efficiency improves, and fixed infrastructure is utilized more effectively. Higher volumes have reduced per-unit delivery costs in Brazil and pushed fulfillment costs in Mexico to record lows, indicating scale is beginning to support profitability rather than pressure margins.

Efficiency gains are increasingly structural, not purely volume-driven. Robotics deployment and optimized warehouse workflows are improving picking and packing productivity while lowering long-term operating costs. The network also absorbed a 28% year-over-year increase in shipments in the third quarter without service disruption, demonstrating stronger capacity utilization typical of scaled platforms.

Faster delivery speeds are reinforcing this operating leverage cycle. Greater penetration of same- and next-day shipping is improving conversion rates and buyer engagement, which further increases order density. Rising transaction volumes then spread fixed logistics costs across a larger base, while companywide expenses such as product development and G&A become progressively diluted.

Taken together, MercadoLibre’s logistics investments appear to be entering the return phase. What previously created margin pressure is now generating structural efficiency gains. If order growth remains durable, the delivery network can evolve into a long-term competitive moat and a consistent contributor to profitability. Supporting this outlook, the Zacks Consensus Estimate projects 2026 revenues of $37.27 billion, implying roughly 30% year-over-year growth.

MELI’s Logistics Business Faces Rising Rival Pressure

Competitive intensity in logistics remains high for MercadoLibre, with Sea Limited SE and JD.com JD emerging as major challengers.

Sea Limited is raising pressure on MELI’s logistics by building a strong localized Shopee delivery network. Sea Limited uses SPX Express to serve cities and rural areas with fast and low-cost shipping, improving customer adoption and seller loyalty. It also adds warehousing and demand forecasting to shorten delivery time and cut costs. With scalable, asset-light logistics and rising order frequency, Sea Limited is becoming a highly efficient rival in emerging-market e-commerce logistics.

JD.com adds strong pressure to MELI’s logistics with its fully integrated supply-chain network. JD.com controls procurement, warehousing, delivery and installation, giving reliable service, competitive pricing and better merchant trust. Its growing JD Logistics platform is used by both internal and external sellers, boosting scale and efficiency. With omnichannel retail, food delivery and global expansion improving fulfillment quality, JD.com is emerging as a premium logistics competitor for higher-value brands and merchants.

MELI’s Share Price Performance, Valuation & Estimates

MELI shares have declined 15.9% in the past six months, underperforming the Zacks Internet-Commerce industry and the Zacks Retail-Wholesale sector’s fall of 13.6% and 1.7%, respectively.

MELI’s Six Month Price Performance

MELI shares are currently overvalued as suggested by a Value Score of C. In terms of the forward 12-month price-to-earnings (P/E), MELI is trading at 31.42X, higher than the industry’s 21.06X.

MELI’s Valuation

The Zacks Consensus Estimate for MELI’s 2026 earnings is pegged at $59.48 per share, down by 0.2% over the past 30 days, indicating a 49.45% year-over-year increase.

MercadoLibre currently carries a Zacks Rank #3 (Hold). 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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