Key Points
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E-commerce in MercadoLibre’s markets is only half the penetration of the U.S., giving it a huge opportunity.
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It reported strong growth in the 2025 fourth quarter.
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MercadoLibre stock trades at an attractive valuation.
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MercadoLibre (NASDAQ: MELI) is an e-commerce powerhouse operating in Latin America and serving 18 countries in the region. It regularly reports strong growth across its business, which includes a large fintech segment, and it has a massive long-term opportunity.
It has a four-digit price tag, trading at $1,768 per share as of this writing. Is it headed to $2,000?
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Creating a digital revolution in Latin America
E-commerce penetration in Latin America is about half that of the U.S., and MercadoLibre is trying to change that, launching new products and improving its value proposition to create the shift. Management said that it sees no reason why the market shouldn’t increase, and that its gross merchandise volume (GMV) “could be multiple times larger over the long term.”
It starts with the customers. MercadoLibre had 83 million unique active buyers as of the end of 2025, a 24% year-over-year increase. As more customers join the platform, more merchants want to be on it, too, creating a flywheel effect. That brings on more products, and as more business is transacted, the bottom line increases, too.
The fintech segment is complementary to the e-commerce platform, with the Mercado Pago digital wallet one option for paying for purchases. But it has developed into a formidable stand-alone business with nearly 78 million monthly active users as of the end of 2025, a 27% increase, and it offers a large assortment of digital financial services.
In the fourth quarter, management said that it’s sacrificing the bottom line right now by investing in new projects that position it for the long term, and that send the price down.
Can MercadoLibre stock get back to $2,000?
MercadoLibre stock was higher than $2,600 in May last year, and it’s down 32% from its high. Investors have had several concerns over the past few months, including a volatile economy in Brazil and the recent margin pressure.
To get back to $2,000, it only needs to gain 14%. Since the stock is fairly cheap at the current price, trading at a forward one-year price-to-earnings ratio of 22 and a price-to-free-cash-flow ratio of 15, it could easily surpass $2,000 if it reports a higher than 14% increase in earnings in its next quarterly results without becoming more expensive. If the market continues to sour on it, it may take longer, but there’s a lot to be confident about long-term, and I anticipate it going a lot higher.
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Jennifer Saibil has positions in MercadoLibre. The Motley Fool has positions in and recommends MercadoLibre. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
