MercadoLibre Delivers Excellent Results, Stock Is Undervalued
Feb 21, 2025
MercadoLibre has been one of our best performers and continues to deliver. The firm reported fiscal-year results with revenue up 38% and even stronger free cash flow growth (+59%). The metrics remain excellent across the board: gross merchandise volume in the commerce segment rose 8% in U.S. dollars but 56% in constant currency, while total payment volume in the fintech business increased 33% as reported and 49% in constant currency. These figures highlight the company's resilience despite weakening local currencies. Items shipped grew 44%, ad revenue rose 41% (88% FX neutral), and fintech monthly active users increased 34%. Despite a decade of rapid expansion, MercadoLibre continues to compound its leadership in e-commerce and digital financial services across Latin America, living up to its moniker as the "Amazon of the Amazon." The stock is a buy, currently trading more than 25% below my fair value target of $2,902.
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