Key Points
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MercadoLibre is the dominant company of its kind in Latin America and is growing fast.
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It still has massive opportunities since its region is underpenetrated in e-commerce.
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Management is investing in the business, which is putting pressure on the bottom line.
- 10 stocks we like better than MercadoLibre ›
Some stocks get most of the market’s attention. Space Exploration Technologies, otherwise known as SpaceX, has been in the limelight since before its initial public offering (IPO) on June 12, and the “Magnificent Seven” stocks (Apple, Alphabet, Amazon, Microsoft, Nvidia, Meta Platforms, and Tesla) frequently dominate the news cycle.
However, you’ll usually find the best investments out of the spotlight. Consider how much a stock can continue to reward investors if it’s already worth several trillion dollars. These companies might have great features that make them worth buying, but they won’t be the ones that turn a small investment into six or seven figures.
If you’re looking for a fantastic, high-growth stock, consider MercadoLibre (NASDAQ: MELI). It’s 35% off its high, and it could be a better buy than SpaceX or any Magnificent Seven stock. Here’s why.
A massive opportunity in digital disruption
MercadoLibre means “free market” in Spanish, and its platform opens up e-commerce to the masses in Latin America. It operates in 18 Latin American countries and is the leading company of its kind in the region. It’s growing rapidly; revenue increased 49% year over year in the first quarter, while gross merchandise volume rose 42% and unique items sold increased 47%.
It had 126 million unique active users as of the 2026 first quarter, providing the company with massive amounts of data that it turns into focused insights. MercadoLibre uses the data in multiple ways, such as an artificial intelligence assistant for customers, including virtual try-ons, resulting in higher-conviction purchases. It has what it calls the most reliable logistic network in the region, with 76% of shipments delivered within 48 hours.
While MercadoLibre is demonstrating solid performance, it’s the opportunity that looks especially compelling. Latin America still lags behind many other global regions in e-commerce penetration, with 14%, in contrast with 27% in the U.S. and 33% in China. While a U.S. customer averages 50 e-commerce purchases annually, a Latin American customer averages seven.
The company has also grown its financial technology business into one of the top players, and it claims to be the largest digital bank in Latin America. MercadoLibre has 83 million monthly active users, which have grown at a compound annual growth rate (CAGR) of 31% from 2020 through this past quarter. The credit portfolio has increased at a CAGR of 94%, while assets under management have increased at a CAGR of 83%.
It’s using AI here too, with a digital assistant for its MercadoPago digital wallet that provides actionable, data-driven suggestions to help customers engage and get their money right.
Why MercadoLibre stock is a bargain
So you may ask, why is the stock down? Profits have been under pressure over the past two quarters. In the first quarter, operating income fell from $763 million to $611 million year over year, and the margin dropped from 12.9% to 6.9%.
Management says that it’s building out now to position itself for future growth. The company has also negatively affected by new customers in the credit business as management widens its risk profile to entice new business.
The company isn’t worried about the long-term impact of these actions; on the contrary, it sees it as necessary and positive for its future. But the market isn’t buying it right now.
At the current price, though, MercadoLibre stock trades at 45 times trailing 12-month earnings, near a 10-year low. Notice that it’s not incredibly cheap even at this price; that implies market confidence. However, it’s still a bargain given the company’s opportunities.
Is it a better buy than SpaceX and all of the Magnificent Seven stocks? When viewed in the context of how much it could grow your money over time, I think it is. And since the company plans to report second-quarter earnings Aug. 5, July could be an auspicious time to buy MercadoLibre stock.
Should you buy stock in MercadoLibre right now?
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Jennifer Saibil has positions in Apple and MercadoLibre. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, MercadoLibre, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool has a disclosure policy.
