MercadoLibre vs. Wayfair: Which E-Commerce Stock Has More Upside Now?

MercadoLibre MELI and Wayfair W are well-known e-commerce companies serving different but large markets. MercadoLibre leads online retail and digital payments in Latin America through its Mercado Pago platform. Wayfair operates mainly in the United States and focuses on selling furniture and home goods online.

Both are pure e-commerce players dealing with changing consumer spending, shipping costs and online advertising trends. MercadoLibre is growing by expanding its payments and lending services, helping boost revenues. Meanwhile, Wayfair is working on cutting costs and improving profitability after demand slowed in the home goods market.

Per the Mordor Intelligence report, the global e-commerce market is projected to grow rapidly through 2031, and both companies have strong opportunities ahead. The key question is: Which stock has greater upside right now — MELI or W? Let’s find out.

The Case for MercadoLibre Stock

MercadoLibre remains the leading online marketplace in Latin American e-commerce, holding more than 30% market share across key markets like Brazil, Argentina and Mexico. The region remains underpenetrated in online retail and digital payments, giving the company strong long-term growth potential.

In the fourth quarter of 2025, MercadoLibre showed strong operating momentum, with revenues surging 45%, supported by the acceleration of its commerce segment and structural growth in fintech services. Lowering the free-shipping threshold in Brazil increased purchase frequency, driving 45% growth in items sold. At the same time, logistics efficiencies improved, with unit shipping costs in Brazil falling 11% year over year.

Its fintech arm, Mercado Pago, is a major advantage. Total Payment Volume reached $83.7 billion, up 42% year over year, while its credit portfolio surged 90% to $12.5 billion. This integration strengthens customer loyalty and boosts monetization.

Although margins were pressured by heavy investments in shipping, promotions and credit expansion, management is focused on long-term ecosystem growth rather than short-term profits. At the same time, competition from Amazon, Shopee and Temu is intensifying across Latin America. These rivals are targeting low-ticket categories and offering faster delivery, forcing MercadoLibre to maintain low fees and high subsidies, which may weigh on near-term margins.

The Zacks Consensus Estimate for MELI’s first-quarter 2026 earnings is pegged at $13.87 per share, up 2.5% over the past 30 days, indicating a 42.4% increase year over year, supporting confidence in the company’s growth trajectory.

The Case for Wayfair Stock

Wayfair showed a solid turnaround in 2025, proving that its business model is stabilizing. In the fourth quarter of 2025, revenues increased 6.9% year over year to $3.3 billion (7.8% excluding Germany). Growth came from both higher-order volumes and better average order value. Contribution margin improved to 15.3%, up 250 basis points, reflecting better cost control and operating efficiency.

Wayfair’s strength lies in its focused home brand, strong logistics network (CastleGate and Wayfair Delivery Network), engaging shopping experience, expanding physical stores and strong supplier relationships. Programs like Wayfair Rewards, which now has more than 1 million members and drives over 15% of U.S. revenues, are helping increase repeat purchases. AI is also being used to improve search, customer service and operations. The company maintains solid liquidity of $1.9 billion and has reduced net leverage below 2.5x.

However, risks remain. The home furnishings market is cyclical and currently weak, which could pressure sales. Margin guidance is toward the lower end of 30%-31% as the company invests in growth. Competition from large retailers and online platforms also limits pricing power.

The Zacks Consensus Estimate for W’s first-quarter 2026 earnings is pegged at 28 cents per share, unchanged over the past 30 days, suggesting strong year-over-year growth of 180%.

Price Performance & Valuation of MELI & W

Over the past year, MercadoLibre stock has fallen 16.7%, lagging behind the sector, which gained 3.2%. In contrast, Wayfair shares surged 91.7% in the same time period, outperforming both MercadoLibre and the broader sector.

Wayfair’s surge comes with heightened volatility risk, as demand for home-related discretionary goods can fluctuate with consumer confidence. Additionally, its debt profile increases exposure to interest rate and refinancing pressures. Conversely, MercadoLibre maintains a more stable profile, driven by consistent growth, fintech expansion, logistics strength and regional market dominance.

MELI vs. W: Price Performance

From a valuation standpoint, MELI trades at a forward 12-month Price/Sales ratio of 2.29, above the Zacks Internet-Commerce industry average of 1.93. In contrast, W appears cheaper with a forward Price/Sales ratio of 0.75. MELI’s overvaluation reflects its stronger growth momentum, expanding profitability and more diversified ecosystem. If execution remains solid, the higher multiple appears justified by its long-term earnings potential.

MELI vs. W Valuation

Why MELI Stock Offers a Better Investment Opportunity

While Wayfair is showing improving profitability and strong share-price momentum, MercadoLibre offers the more compelling long-term upside. Its dominant market share in underpenetrated Latin America, rapid fintech expansion, accelerating earnings growth and integrated ecosystem provide stronger structural advantages. Despite near-term margin pressure, MELI’s scalable platform and diversified growth engines make it the superior investment choice.

Both MercadoLibre and Wayfair carry a Zacks Rank #3 (Hold) at present. 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