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

We came across a bullish thesis on MercadoLibre, Inc. (MELI) on Substack by Daan | InvestInsights. In this article, we will summarize the bulls’ thesis on MELI. MercadoLibre, Inc. (MELI)'s share was trading at $2584.92 as of May 16^th. MELI’s trailing and forward P/E were 63.59 and 52.91 respectively according to Yahoo Finance.

MercadoLibre (MELI) is the undisputed leader in Latin America’s e-commerce and FinTech sectors, operating in a region still early in its digital transformation. With smartphone penetration at just 50% and e-commerce accounting for only 10% of total retail—far behind the U.S.—the runway for digital adoption is vast. MELI has captured this opportunity with over 100 million unique buyers and a 22% market share, positioning itself to benefit from a projected 22% e-commerce CAGR through 2030. Its FinTech arm, Mercado Pago, has surged to over 60 million users, dominating markets like Mexico, Chile, and Argentina, and rapidly gaining ground in Brazil. As much of the region remains cash-based, MELI’s dual-platform strategy is uniquely poised to benefit from the secular shift toward digital finance and retail.

MELI’s Q1 2025 results underscored its momentum: revenue grew 37% YoY to $5.9 billion, powered by a 125% revenue surge in Argentina. E-commerce metrics were robust—Gross Merchandise Volume reached $13.3 billion, up 17% YoY, while unique buyers grew 26%, marking the strongest user growth since Q1 2021. With ROE at 34% and ROIC at 24%, MELI is scaling profitably. Despite a 52% YTD stock gain, its PEG ratio of 1.6x and a forward P/E of 52x suggest valuation remains reasonable. The valuation model has a $3,492 price target by 2027, implying a 12% annual return. Backed by secular tailwinds, a dominant market position, and proven execution, MELI offers a compelling long-term growth story, with the potential to become Latin America’s first $1 trillion company. Also, explore Nu Holdings, another key player in LatAm’s digital revolution.

MercadoLibre, Inc. (MELI) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 96 hedge fund portfolios held MELI at the end of the fourth quarter which was 87 in the previous quarter. While we acknowledge the risk and potential of MELI as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than MELI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.