Key Takeaways
- MercadoLibre stock fell 10% in the week to Nov. 10 after third-quarter EPS came in at $8.83, short of the $9.27 analysts expected, even as revenue rose 45%.
- Management chose the squeeze, spending on free shipping and warehouses while Sea Limited’s Shopee keeps gaining in Brazil.
- Brazil’s cost per shipment is falling, and credit held steady, a bar for Nu Holdings ahead of its expected Nov. 12 report.
- Analysts still expect an earnings rebound, and the stock trades far below its usual forward multiple.
MercadoLibre (MELI) stock fell 10% from Nov. 3 to Nov. 10, with most of the damage in a 12% drop on Nov. 5, the day after its report. Revenue rose 45% to $10.75 billion, but EPS of $8.83 missed the $9.27 expected.
That spending comes as Shopee, owned by Sea Limited (SE), pushes harder in Brazil, which Sea said on Nov. 10 was again its fastest-growing market. And MercadoLibre’s credit sets a bar for Nu Holdings (NU), which is expected to report on Nov. 12.
The miss was a choice
Operating income fell 6.6% to $676 million, a 6.3% margin against 9.8% a year earlier. The company paid for more free shipping, added fulfillment space ahead of the holidays and stepped up affiliate marketing in Brazil. CEO Ariel Szarfsztejn told analysts the company is spending because the opportunity in front of it is large. “We have accepted a lower margin to do that,” he said.
But the shipping bill is starting to shrink: Brazil’s cost per shipment fell 5% from a year earlier in local currency. And in September, orders between R19andR79, which now ship free, paid their own variable costs for the first time.
Shopee is pushing just as hard. It launched four-hour delivery in greater São Paulo in August with more than 4,000 partner stores, and Sea said on Nov. 10 that the service now runs from more than 7,000. MercadoLibre began testing one-hour delivery in parts of the city in September. Sea also said Shopee again grew faster than Brazil’s broader market in the third quarter.
TIKR tracks 26 analysts on MercadoLibre. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on MercadoLibre, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See MercadoLibre’s Analyst Ratings
Analysts still see a rebound
Analysts still expect a sharp rebound:
But the 2027 figure is down more than a third from where it stood in September 2025, so the rebound has been pushed out before.
Credit held up, with loans 15 to 90 days late at 7.0% of a portfolio that grew 62% in a year to about $18 billion. Nu’s ratio was 4.8% in the second quarter, and its next results will show whether its Brazil book is holding up as well.
The stock is cheap against its own history:
It traded at 34x on Nov. 9, far below its five-year average of 62x and not far above its five-year low of about 30x.
If the margin recovers as the network fills, today’s multiple could reward investors who wait out the squeeze. The holiday quarter is the first test: CFO Martin de los Santos expects part of the capacity cost to reverse in the fourth quarter as volumes rise, though higher energy costs may linger.
So what is MercadoLibre stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
