Key Points
- MercadoLibre has fallen nearly 40% from its all-time high, whilst revenue surged 45% year over year to $8.8 billion in Q4.
- Despite the sharp drawdown, 19 analysts hold a consensus Moderate Buy rating with a price target implying nearly 67% upside.
- With the stock approaching its 200-day SMA on the weekly chart and its forward P/E compressing into the low 20s, MELI may be offering one of its most attractive entry points in recent years.
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MercadoLibre (NASDAQ: MELI), often referred to as the Amazon (NYSE: AMZN) of Latin America, may be approaching discount territory. The stock has fallen almost 40% from its all-time high and is now down nearly 20% year to date.
Market selloffs can be uncomfortable, but they also create long-term buying opportunities in great companies.
With MELI's valuation compressing significantly, sidelined investors may finally be getting the entry point they've been waiting for.
A Dominant Force in Latin American E-Commerce
MercadoLibre is the leading e-commerce and fintech platform in Latin America, connecting millions of buyers and sellers across 18 countries. Its core business is a vast online marketplace spanning electronics, fashion, vehicles, and more. But the company is far more than just an e-commerce platform. It also provides digital payments, credit, and insurance services, targeting the rapidly growing and largely underserved middle class across the region. That combination of e-commerce dominance and financial services expansion positions MercadoLibre as a critical player in Latin America's broader economic development.
A Company Still Very Much in Growth Mode
There's a clear reason why sentiment on MELI remains broadly bullish. The company has been consistently growing sales and expanding its footprint across Latin America at an impressive pace. Throughout 2025, it consistently topped revenue estimates quarter after quarter.
Its most recent report, released on Feb. 24 for Q4 2025, did bring some headline noise. MELI reported a 12.5% decline in quarterly profits, missing expectations on the bottom line. But the reason behind the miss matters. Management deliberately increased investments focused on long-term performance. That included issuing more credit cards, which increases provisions, expanding free shipping, and ramping up its first-party direct sales model. These are growth investments, not signs of a deteriorating business. And investing for future growth at the cost of a short-term pain is something management has done before.
The top-line numbers back that up. Revenue rose 45% year over year to $8.8 billion, comfortably above the $8.5 billion analyst consensus. The company's credit portfolio jumped 90% year over year to $12.5 billion. Total payment volume in the acquiring business grew approximately 40%. And looking ahead, earnings are expected to grow 43.61% next year, from $43.96 to $63.13 per share.
Sentiment Is Bullish as the Stock Enters Deep Pullback Territory
Despite the sharp decline, Wall Street and institutions remain firmly in the bull camp. Based on 19 analyst ratings, MELI has a consensus rating of Moderate Buy. The consensus price target implies nearly 70% upside potential from current levels. That is a substantial target for a company already valued at $82 billion, and it reflects genuine conviction in the long-term opportunity.
Institutional flows tell a similar story. Over the prior 12 months, institutions have purchased over $20 billion in MELI stock, versus outflows of just under $15 billion. Insider activity has been notably quiet on the selling side, too. Only three insider sales have been recorded over the prior 12 months, totaling just $2.3 million. That kind of insider restraint during a major uptrend last year and now drawdown speaks volumes.
The Chart Is Approaching a Key Level
On the weekly timeframe, MELI remains in a broader uptrend. The stock is now approaching its 200-day Simple Moving Average on the weekly chart, a level that has historically served as a significant support zone. If the stock begins to build a base in this area, it could mark the start of meaningful stabilization.
The valuation picture is also becoming increasingly compelling. With the forward price-to-earnings ratio (P/E) now approaching the low 20s, MELI is trading at one of its more attractive entry points in recent years. For long-term investors waiting for an opportunity to get involved in this Latin American e-commerce giant, the setup is becoming harder to ignore.
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