MercadoLibre Fell 15% Over 12 Months: 50% Gains Coming in The Next 12 Says Wall Street Pro
MercadoLibre's revenue is growing at its fastest pace in four years, yet the stock keeps sliding while profits shrink and earnings estimates drift lower. One Wall Street analyst sees a massive rebound ahead, but his case depends on a single…
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MercadoLibre (NASDAQ:MELI | MELI Price Prediction) currently trades at $1,860.61, while Wall Street’s average price target stands at $2,269.94. That leaves a gap of roughly 22% separating the stock from where analysts think it belongs.
MercadoLibre runs Latin America’s dominant e-commerce marketplace alongside Mercado Pago, a fintech arm spanning payments, credit cards and lending. Quarterly revenue just reached $10.17B, up 49.8%, its fastest growth in four years.
The most bullish analysts goes further. Scotiabank’s Hector Maya holds a Street-high $2,800 target with a Sector Outperform rating. That implies about 50.5% upside, a gap large enough to demand scrutiny.
Record Sales, Shrinking Profits Sent MercadoLibre Lower
Margins drove the decline. Operating margin contracted 550bps to 6.7% in Q2, and operating income fell 17.2% to $683M even as sales surged. Management calls it deliberate: lower free shipping thresholds in Brazil, heavy credit card issuance, first-party inventory, cross-border trade from China, PIX discounts, and AI spending roughly $80 million higher than a year ago.
Back-to-back misses had already worried investors. Q3 2025 EPS of $8.32 missed by 10.51%, and Q4 2025 EPS of $11.03 missed by 6.92%. Argentine peso weakness, Mexico tax reform and net debt rising to $6.4B from $4.7B added pressure. Even the Q2 beat failed to help, with shares slipping from $1,893.20 to $1,820.69 a day later.
22 of 26 Analysts Still Call MercadoLibre a Buy
Of 26 analysts, 5 give it a Strong Buy, 17 a Buy and 4 a Hold, with zero Sells. Their evidence: ecosystemic users grew 37%, assets under management rose 68% to $23B, and advertising grew 62% FX-neutral. In Brazil, conversion improved 1.1 percentage points after the free shipping change.
Maya cut his target from $3,500 after the margin reset but kept his Outperform call, viewing the dip as an entry point. His thesis rests on the Mercado Envios logistics moat, Mercado Pago converting unbanked users into credit customers, high-margin ads offsetting fulfillment costs, and barriers that keep Shopee and Amazon (NASDAQ:AMZN) at bay.
Credit cards set the timeline. Management says each cohort breaks even after 12 to 18 months, and Brazil issuance jumped to 2.6 million cards from 1.6 million a year earlier. Card NIMAL stands at -2.5%, so maturing cohorts are the swing factor for 2027 earnings.
Estimates are drifting lower, though. The 2026 EPS consensus of $38.167 drew 12 downward revisions against 2 upward over 30 days. Targets are opinions, and the inputs behind them are moderating.
Sea Limited Fell Harder While Amazon Climbed
MercadoLibre has company in its decline, but the peer group split sharply.
Sea Limited (NYSE:SE), whose Shopee competes directly in Brazil, dropped 48.89% over 12 months to $96.85. Its average target of $155.11 implies roughly 60.2% upside, with 27 of 29 analysts at Buy or Strong Buy. The story rhymes: revenue grew 48.1% while credit loss provisions jumped 71.5%.
Amazon rose 13.81% over the year to $251.40. Its average target of $330.59 implies about 31.5% upside, and 58 of 60 analysts rate it Buy or better.
Sea holds the group’s largest consensus-implied upside. MercadoLibre’s consensus gap trails both peers, and only Scotiabank’s target pushes it near Sea’s territory.
A 14% Slide Against a Rising S&P 500
At $1,860.61, MercadoLibre sits roughly 22% below its $2,269.94 consensus target from 26 analysts. Shares are down 14.37% over one year and 7.63% year to date. The S&P 500 gained 15.78% over one year and 13.62% year to date.
Momentum just turned. The stock rose 8.65% in the past week, including a 9.67% jump in the latest session. The forward P/E of 33 compares with a trailing 46, inside a 52-week range of $1,495 to $2,428.
MercadoLibre Rewards Patience, but the $2,800 Target Is a Stretch
The outlook improves if credit card cohorts mature on schedule and margins steady near current levels while revenue keeps growing above 40%. That path, plus ads and AI efficiencies (customer-service reps fell from 10,000 to 7,000), could revive earnings growth in 2027. The thesis weakens if EPS revisions keep falling, Argentina’s currency weakens again, or rising debt funds a loan book that sours in a Brazilian slowdown.
My take is bullish. The consensus target looks reachable as cohorts mature, while the $2,800 call needs everything to go right. Investors should keep an eye on margins and credit quality in the next earnings report.
Contact [email protected] for any questions or corrections.
Alex Sirois is a financial writer with experience spanning both retail and institutional investing. He has written for InvestorPlace and held roles at BNY Mellon and Bernstein, giving him a perspective that bridges Main Street portfolios and Wall Street analysis.
Alex holds an MBA from George Washington University and has built his career across multiple industries, including e-commerce, education, and translation — a breadth of experience that informs how he breaks down complex financial topics for everyday investors. His writing is conversational, actionable, and grounded in long-term, buy-and-hold investing principles.
At 247 Wall St., Alex focuses on delivering analysis that is both accessible and useful, with a clear emphasis on helping readers make more informed decisions with their money.
