Here's WhyMercadoLibre (MELI) has Strong Growth Prospects

Loomis Sayles, an investment management company, released its “Global Growth Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter, the fund returned -3.35% compared to -1.32% for the MSCI ACWI Net Index. Stock selection in consumer staples, communication services, and healthcare sectors, and allocations to the information technology and healthcare sectors positively impacted the fund’s relative performance. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Loomis Sayles Global Growth Fund highlighted stocks such as MercadoLibre, Inc. (NASDAQ:MELI). MercadoLibre, Inc. (NASDAQ:MELI) is an online commerce platform that operates Mercado Libre Marketplace and Mercado Pago FinTech platforms. The one-month return of MercadoLibre, Inc. (NASDAQ:MELI) was 13.56%, and its shares gained 48.08% of their value over the last 52 weeks. On May 23, 2025, MercadoLibre, Inc. (NASDAQ:MELI) stock closed at $2,507.83 per share with a market capitalization of $127.14 billion.

Loomis Sayles Global Growth Fund stated the following regarding MercadoLibre, Inc. (NASDAQ:MELI) in its Q1 2025 investor letter:

"MercadoLibre, Inc. (NASDAQ:MELI) is the largest online commerce platform in Latin America. The company offers its users an ecosystem of six integrated e-commerce services that include its marketplace, payment and fintech solutions, shipping and logistics, advertising, classified listings, and merchant web services. In its most recent fiscal year, commerce and related services accounted for approximately 59% of net revenue, while payments and fintech solutions accounted for approximately 41%. The company operates in 18 countries representing the vast majority of Latin American GDP, and its 218 million active users, last disclosed in 2023, represented over 45% of the region’s estimated 480 million total internet users. We believe MercadoLibre benefits from strong and sustainable competitive advantages that include its network and ecosystem, brand, and understanding of local markets that collectively contribute to its leadership position in each market it serves. With continued growth in internet access, increasing availability of credit, and the company’s continuing investments to improve the ease and convenience of transacting online, we believe MercadoLibre remains well positioned for sustained growth over the next decade, driven by the secular growth of e-commerce across Latin America.

A fund holding since inception, MercadoLibre reported strong quarterly financial results that were above consensus expectations for gross merchandise volume (GMV), revenue, operating income, and earnings per share. The company continues to execute well and gained market share in e-commerce, payments, and financial services. Despite remaining in a period of elevated investment spending, the company also showed improvements in operating profits that were materially above consensus expectations, as well strong growth in free cash flow. Since 2019, the company’s GMV has increased by approximately 3.5 times, reflecting the high value proposition to consumers, and the company continues to invest in providing better selection, price, and service…” (Click here to read the full text)

MercadoLibre, Inc. (NASDAQ:MELI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 108 hedge fund portfolios held MercadoLibre, Inc. (NASDAQ:MELI) at the end of the first quarter which was 96 in the previous quarter. While we acknowledge the potential of MercadoLibre, Inc. (NASDAQ:MELI) as an investment, our conviction lies in the belief that 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 as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered MercadoLibre, Inc. (NASDAQ:MELI) and shared Baron FinTech Fund's views on the company. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.

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