Mercado Libre MELI is a well-established fintech and e-commerce company with a strong presence in the Latin American markets. The company has a large and steadily growing customer base, a reputable brand, and insightful experience in the region. With the e-commerce market in Latin America experiencing rapid growth, Mercado Libre is in a prime position to capture a significant share of that growth. As a result, many analysts, myself included, consider the company’s stock an excellent investment opportunity for those looking to invest in the expanding e-commerce and fintech market in Latin America.
Mercado Libre operates in 18 countries in Latin America. With its online marketplace, buyers and sellers can transact securely through multiple payment methods, while its payment processing service provides secure online transactions. The company also offers logistics solutions for efficient shipping as well as credit services for finance.
With its solid management and proven track record of growth, Mercado Libre presents an attractive investment opportunity for those seeking exposure to the expanding e-commerce market in Latin America.
Mercado Libre’s competitive differentiators include scale, branding and local-market knowledge. Mercado Libre is the largest e-commerce company in Latin America, with a market share of over 50% — giving it a significant advantage in terms of reach and scale. The company is a well-known brand in Latin America — giving it a significant advantage in terms of attracting new customers. And Mercado Libre deeply understands the local market in Latin America — giving it the ability to tailor its products and services to customer needs.
The Competition
The e-commerce market in Latin America is a rapidly growing opportunity for Mercado Libre, which currently holds a roughly 50% market share. The market is expected to reach $27.38 Billion by 2028, growing at a 21.9% CAGR.
Though Mercado Libre currently leads the market in share terms, it’s important to acknowledge the presence of competitors such as Amazon and Alibaba. These two companies are investing heavily in Latin American markets — which means Mercado Libre must continue investing in its own business to maintain market leadership.
Mercado Libre is expanding its presence in Latin America by entering new markets like Colombia and Peru. Recently, the company expanded into ten new countries, which could help it attract new customers and grow its business.
Mercado Pago, the financial technology subsidiary of Mercado Libre, stands to serve as a significant catalyst for the company’s future growth. Its targeted approach addresses the financial needs of the underbanked population of Latin America, a vast market with significant untapped potential. As it continues to develop, Mercado Pago has been expanding its offerings to include services such as digital wallets and credit solutions, creating multiple streams of revenue.
The close integration of Mercado Pago with MercadoLibre’s e-commerce platform enhances the user experience by providing seamless financial transactions, which in turn bolsters user engagement and loyalty. This synergy is a key driver for both platforms, creating a powerful growth engine.
Meanwhile, the credit service business, Mercado Credito, a key component of Mercado Pago’s operations, has seen rapid growth and promises high-profit margins, which could significantly contribute to the overall profitability of Mercado Libre.
As a result, Mercado Libre’s financial performance has been consistently strong over the past decade, with the company maintaining profitability and experiencing impressive revenue and earnings growth. From 2021, the company’s revenue surged by 26%, and earnings per share increased by 46%.
Mercado Libre Analyst Ratings:
| Institution | Rating | Price Target |
| Bank of America | Buy | $1,800 |
| Goldman Sachs | Buy | $1,700 |
| Morgan Stanley | Overweight | $1,600 |
| Jefferies | Buy | $1,500 |
| RBC Capital Markets | Overweight | $1,450 |
The consensus behind Mercado Libre is that it will be a strong performer in the coming 12 months and is a buy. With the company’s track record of strong financial performance, investors are optimistic. If it can properly leverage its dominant position in the Latin American e-commerce market, Mercado Libre has the potential for even greater growth.
