Should I Invest in MercadoLibre Stock?

Are you looking for a way to invest in a quick-growing Latin American stock? MercadoLibre (MELI) is a leading e-commerce company that offers an online platform where people can buy and sell goods and services. 


MercadoLibre, Inc.
company nameMercadoLibre, Inc.
sectorConsumer Cyclical
industryInternet Retail
addressPasaje Posta 4789, Buenos Aires, Argentina
countryArgentina
websitehttps://www.mercadolibre.com

Mercadolibre (MELI) has been growing rapidly since its inception in 1999, which has helped it become the largest Latin American ecommerce site with over 100 million active users in 2020.  

The company has been expanding its business into new areas like financial services, logistics, and more. It’s also making strategic investments that will help it expand even further. 

If you want to get in on this growth story now before everyone else catches on, then buying MELI stock could be your best bet.

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About Mercadolibre Inc.

Long before there was Amazon, Mercadolibre (MELI) was operating in Latin American countries in many of the ways we use Amazon today. They wanted to help fill the gaps using technology where people weren't able to find products and equalize the consumer playing field between large and small business owners.

Based on the entrepreneurial spirit, their company has been largely successful at fulfilling their commitments originally born from their inspiration to aid the entrepreneur's success, give back to their communities and the planet, and reduce their carbon footprint.

This unique combination and relationship have given Mercadolibre the continued success they enjoy today.  Mercadolibre is the largest Latin American e-commerce company that also operates MercadoPago, the leading online payment platform in the region.

Mercadolibre operates in over 18 countries, including Argentina, Brazil, Mexico, Colombia, Chile, Venezuela, and Peru.  Mercadolibre connects millions of buyers and sellers every day, offering them a variety of products at great prices. 

Mercadolibre's main objective and primary goal is to provide innovative technological and commercial solutions for running an online marketplace and payment system in Latin America.

Its mission is to create opportunities for small businesses around the world by helping them grow their sales online.

Key People

With a respectable list of Board of Directors, Mercadolibre has been able to grow since its inception in 1999. 

Some of the key people in Mercadolibre's management team include:

  • Marcos Galperin - Co-Founder, Chairman, CEO, and President
  • Osvaldo Gimenez - Executive Vice President - Payments
  • Pedro Arnt - CFO and VP
  • Stelleo Tolda - COO and Executive VP
  • Daniel Rabinovich - CTO and Executive VP
  • Michael Spence - Independent Director
  • Nicolas Galperin - Director
  • Meyer Rais - Independent Director
  • Mario Vazquez - Independent Director
  • Nicolas Aguzin - Independent Director
  • Susan Segal - Independent Director
  • Veronica Serra - Lead Independent Director
  • Emiliano Calemzuk - Independent Director
  • Javier Olivan - Independent Director
  • Roberto Sallouti - Independent Director
  • Alejandro Aguzin - Independent Director
  • Marcelo Melamud - Chief Accounting Officer and VP
  • Federico Sandler - Head of Investor Relations

In the last couple of years, their growth and expansion have increased due to the pandemic. It has helped push the advancement of their logistics and continued expansion of sales online in response to competition in the surrounding areas from Amazon and other e-commerce companies.

Bull Case

Investing in Mercadolibre is a great way to diversify your portfolio and expose yourself to the global market.

  • The number of successful items sold increased by 26.3% year over year, to 259.8 million pieces in 2021.
  • Third-quarter net revenues were $1.9 billion, a year-over-year increase of 66.5% in USD and 72.9% on an FX neutral basis, according to the company.
  • Gross profit was up in third-quarter comparisons between 2021 and 2020.
  • Net income increases were realized when comparing third-quarters between 2021 and 2020.
  • Not having any language barriers which may prevent someone else from taking advantage of an emerging market's growth potential due primarily because they don't speak their native tongue!
  • Reduced Risk - Mercadolibre is a market leader in Latin America and has been operational for over 17 years!
  • The company is committed to innovation, which will help them maintain its competitive edge. Mercadolibre has plans to expand into new areas.
  • They have a strong management team that has been able to grow Mercadolibre.

Bear Case

Like with any investment, there are associated risks involved that must be considered.

  • We experienced a $25.2 million loss in foreign currency, which was mostly due to the weakening of our three primary geographic currencies.
  • Higher-income tax expenses are realized in Brazil vs. Argentina's income tax benefit subsidiary, affecting net income.
  • Volatility - The stock is highly volatile and can go up or down rapidly.
  • Competition from Amazon and other e-commerce companies.
  • Credit risk - Mercadolibre has a high amount of debt which could put the company at risk if it is unable to repay its debt.
  • Regulatory risks - Mercadolibre is subject to several regulations in Latin America that could change and impact the company's operations.
  • No dividend payouts since 2017.

MercardoLibre Competitors

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SymbolSE
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BABAAlibaba Group Holding Limited
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SymbolBABA
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EEtsy, Inc.
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SShopify Inc.
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Volume$5,442,529.00
Marketcap45.47B

Final Verdict

Despite any local or nearby competition from other e-commerce companies, Mercadolibre is continuing to expand and develop at high speed.  

The most important thing for investors to know about the company is that it has been able to grow at such a pace by focusing on user experience and quality of service. 

This means they have helped create loyal customers who keep coming back again and again because they love how easy it is to use the website or app as well as knowing their purchase will arrive quickly without any hassle. 

Here are some additional reasons why purchasing shares in MELI might be a good idea: 

  • It's one of Latin America’s largest e-commerce sites.
  • They have recently announced their plans to expand and invest more into Mexico and Brazil – which will help them gain more market share and increase revenue even further than before! 
  • They also just released new features on their website that make selling products easier than ever before – meaning more customers will be able to find what they need faster than ever before too! 

And if all of that wasn’t enough reason for you already, the price per share is currently very low compared to other moments in the company's stock history.

Taking advantage of the drops as sales adjust during the pandemic and predictions of a stock that will rise as increases in online shopping continues. Don’t wait any longer; consider investing in MELI stock today.

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