Investment Insights: MercadoLibre and Toast as Growth Stocks
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 4 days ago
0mins
Should l Buy MELI?
Source: Fool
- MercadoLibre Growth Momentum: Currently, MercadoLibre's stock is down 34% from its all-time high, yet it achieved a 45% year-over-year revenue growth in Q4 2025, marking its 28th consecutive quarter of over 30% growth, demonstrating a strong business flywheel effect, and despite trading at its lowest price-to-sales ratio since the Great Recession, it is still seen as a prime investment opportunity.
- User Growth and Market Share: The fintech user base for MercadoLibre grew by 27% in Q4, reaching 78 million users, which propelled a 37% increase in gross merchandise volume on its platform, indicating that the synergy among its various business segments is strengthening, further solidifying its leadership position in the Latin American e-commerce market.
- Toast's Profit Potential: In Q4 2025, Toast's annual recurring revenue (ARR) hit $2 billion, growing 26% year-over-year, with its subscription software solutions boasting a gross margin of 70%, showcasing strong growth potential in the restaurant technology sector; although initial customer acquisition impacts profits, it is expected to convert into a long-term profitability advantage.
- Market Competition and Valuation: Toast's stock has fallen nearly 50% from its highs, currently trading at 2.5 times sales; despite facing fierce market competition, management believes it has a path to achieving $10 billion in ARR, indicating an optimistic growth outlook in the restaurant industry.
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Analyst Views on MELI
Wall Street analysts forecast MELI stock price to rise
11 Analyst Rating
10 Buy
1 Hold
0 Sell
Strong Buy
Current: 1714.010
Low
2500
Averages
2783
High
2950
Current: 1714.010
Low
2500
Averages
2783
High
2950
About MELI
MercadoLibre Inc is a Uruguay-based e-commerce business facilitator of Argentinian origins. The e-commerce products enable retail and wholesale via Internet platforms designed to provide users with a portfolio of services to facilitate commercial transactions. The Company's geographic coverage includes 18 countries of Latin America. The primary offer is an ecosystem of six integrated e-commerce services: the Mercado Libre Marketplace, the Mercado Libre Classifieds service, the Mercado Pago payments solution, the Mercado Credito financial solutions, the Mercado Envios logistic solutions including shipping, the Mercado Ads advertising platform and the Mercado Shops digital storefront solution.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
MercadoLibre's Attractive Ecosystem Drives Growth
- Significant User Growth: Mercado Pago boasts 78 million monthly active users, driving the use of financial services and enhancing customer loyalty on the e-commerce platform, which in turn boosts overall revenue growth for the company.
- Rapid Credit Portfolio Expansion: The company's credit portfolio grew by 90% year-over-year in Q4, not only meeting everyday financial needs but also encouraging spending on the MercadoLibre marketplace through credit card rewards.
- Strong Performance in Brazil: Investments in value-enhancing initiatives led to a 35% year-over-year increase in gross merchandise volume (GMV) in Brazil during Q4, indicating significant progress in improving customer experience and market share.
- Attractive Valuation: With a current price-to-sales ratio of around 3, significantly lower than the five-year average of 6.8, MercadoLibre's stock presents a compelling buying opportunity for investors in the current market environment.
See More
Buffett Warns Investors to Stay Cautious Amid Market Highs
- SoFi Technology Growth: In Q4 2025, SoFi's adjusted net revenue surged 37% year-over-year, adding a record 1 million members for a total of 13.7 million, indicating strong growth potential in the U.S. financial market, particularly among young professionals.
- Stable Revenue Source: With nearly 90% of SoFi's deposits being direct deposits, the company enjoys a stable revenue stream that supports its growth-oriented platform, and management is optimistic about launching blockchain products, showcasing its innovation-driven business strategy.
- MercadoLibre Market Potential: MercadoLibre's gross merchandise volume increased by 37% year-over-year in Q4, with total payment volume rising 53%, reflecting robust growth in the Latin American market, especially amid digital transformation.
- User Growth and Market Expansion: Unique active buyers for MercadoLibre rose 24% year-over-year, and the company plans to open full digital banks in Mexico and Argentina, further expanding its market share, with expectations of becoming a much stronger company in the next decade, rewarding shareholders significantly.
See More
MercadoLibre Faces Competitive Pressures and Investment Challenges
- Earnings Warning: MercadoLibre's latest quarterly update reveals a 45% year-over-year revenue increase to $8.8 billion, yet net income fell 12.5% to $559 million, missing analyst expectations and indicating significant profitability challenges amid intensifying competition.
- Increased Competition Impact: As the leading e-commerce player in Latin America, MercadoLibre faces fierce competition from Shopee, which has eroded its market share through competitive pricing, contributing to a 14% decline in the stock price over the past year.
- Strategic Investment Moves: In response to Shopee's advances, MercadoLibre is lowering the free shipping minimum, expanding its credit business, and doubling down on artificial intelligence initiatives; while these strategies may reduce earnings and margins in the short term, they are expected to enhance the company's competitive edge in the long run.
- Future Growth Potential: With Latin America's e-commerce market growing rapidly, MercadoLibre's investment strategy aims to capitalize on this opportunity, making the current stock dip a potential buying opportunity for patient investors despite the ongoing challenges.
See More
MercadoLibre's Quarterly Results Fall Short of Expectations
- Earnings Decline: MercadoLibre's latest quarterly update revealed a net income of $559 million, down 12.5% year-over-year and missing analyst expectations, which has contributed to a 14% decline in stock price over the past 12 months.
- Increased Competition: Despite being the leading e-commerce player in Latin America, MercadoLibre faces significant pressure from competitors like Shopee, which has been successfully eroding its market share by offering more competitive pricing.
- Strategic Investments: The company is lowering the free shipping minimum, which, while increasing short-term costs, is expected to boost overall gross merchandise volume and enhance market competitiveness.
- Future Growth Potential: MercadoLibre is expanding its credit business and investing heavily in artificial intelligence; although this may lead to lower earnings and margins in the short term, these initiatives are anticipated to drive future growth, particularly in the rapidly expanding Latin American e-commerce market.
See More
Kemnay Advisory Services Increases Stake in MercadoLibre
- Share Acquisition Details: Kemnay Advisory Services Inc. increased its position in MercadoLibre by 1,385 shares during Q4 2026, with an estimated trade value of $2.91 million, bringing total holdings to 5,623 shares and reflecting a $1.42 million increase from the previous quarter due to both trading and stock price effects.
- Holding Proportion Analysis: Following this purchase, Kemnay's stake in MercadoLibre represents 1.71% of its 13F AUM, indicating a sustained bullish outlook on the company despite a 3.77% decline in share price over the past year.
- Market Performance Overview: As of February 16, 2026, MercadoLibre shares were priced at $1,988.26, with a market capitalization of $100.80 billion, maintaining rapid revenue growth despite pressures from increased e-commerce competition and rising bad loans.
- Investor Outlook: Kemnay has held MercadoLibre shares since Q2 2020, having previously sold off shares, but has now added shares in each of the last four quarters, suggesting they view the current stock price as an attractive buying opportunity, potentially leading to further purchases in the future.
See More
Kemnay Increases MercadoLibre Holdings by 1,385 Shares
- Share Increase: Kemnay Advisory Services Inc. disclosed a purchase of 1,385 shares of MercadoLibre in Q4 2026, with an estimated trade value of $2.91 million, indicating confidence in the company's prospects.
- Holding Status: As of February 2026, Kemnay's total holdings in MercadoLibre reached 5,623 shares, reflecting a $1.42 million increase from the previous quarter, showcasing a positive market sentiment.
- Market Performance: Despite MercadoLibre's share price declining by 3.77% over the past year and trailing the S&P 500 by 15.56 percentage points, Kemnay's increased stake suggests they view the current price as attractive.
- Investment Opportunity: Since acquiring shares in Q2 2020, Kemnay's recent purchases over the last four quarters may indicate confidence in the company's growth potential, particularly as economic conditions improve in Argentina and Venezuela.
See More
MercadoLibre's Attractive Ecosystem Drives Growth
- Significant User Growth: Mercado Pago boasts 78 million monthly active users, driving the use of financial services and enhancing customer loyalty on the e-commerce platform, which in turn boosts overall revenue growth for the company.
- Rapid Credit Portfolio Expansion: The company's credit portfolio grew by 90% year-over-year in Q4, not only meeting everyday financial needs but also encouraging spending on the MercadoLibre marketplace through credit card rewards.
- Strong Performance in Brazil: Investments in value-enhancing initiatives led to a 35% year-over-year increase in gross merchandise volume (GMV) in Brazil during Q4, indicating significant progress in improving customer experience and market share.
- Attractive Valuation: With a current price-to-sales ratio of around 3, significantly lower than the five-year average of 6.8, MercadoLibre's stock presents a compelling buying opportunity for investors in the current market environment.
See More
Buffett Warns Investors to Stay Cautious Amid Market Highs
- SoFi Technology Growth: In Q4 2025, SoFi's adjusted net revenue surged 37% year-over-year, adding a record 1 million members for a total of 13.7 million, indicating strong growth potential in the U.S. financial market, particularly among young professionals.
- Stable Revenue Source: With nearly 90% of SoFi's deposits being direct deposits, the company enjoys a stable revenue stream that supports its growth-oriented platform, and management is optimistic about launching blockchain products, showcasing its innovation-driven business strategy.
- MercadoLibre Market Potential: MercadoLibre's gross merchandise volume increased by 37% year-over-year in Q4, with total payment volume rising 53%, reflecting robust growth in the Latin American market, especially amid digital transformation.
- User Growth and Market Expansion: Unique active buyers for MercadoLibre rose 24% year-over-year, and the company plans to open full digital banks in Mexico and Argentina, further expanding its market share, with expectations of becoming a much stronger company in the next decade, rewarding shareholders significantly.
See More
MercadoLibre Faces Competitive Pressures and Investment Challenges
- Earnings Warning: MercadoLibre's latest quarterly update reveals a 45% year-over-year revenue increase to $8.8 billion, yet net income fell 12.5% to $559 million, missing analyst expectations and indicating significant profitability challenges amid intensifying competition.
- Increased Competition Impact: As the leading e-commerce player in Latin America, MercadoLibre faces fierce competition from Shopee, which has eroded its market share through competitive pricing, contributing to a 14% decline in the stock price over the past year.
- Strategic Investment Moves: In response to Shopee's advances, MercadoLibre is lowering the free shipping minimum, expanding its credit business, and doubling down on artificial intelligence initiatives; while these strategies may reduce earnings and margins in the short term, they are expected to enhance the company's competitive edge in the long run.
- Future Growth Potential: With Latin America's e-commerce market growing rapidly, MercadoLibre's investment strategy aims to capitalize on this opportunity, making the current stock dip a potential buying opportunity for patient investors despite the ongoing challenges.
See More
MercadoLibre's Quarterly Results Fall Short of Expectations
- Earnings Decline: MercadoLibre's latest quarterly update revealed a net income of $559 million, down 12.5% year-over-year and missing analyst expectations, which has contributed to a 14% decline in stock price over the past 12 months.
- Increased Competition: Despite being the leading e-commerce player in Latin America, MercadoLibre faces significant pressure from competitors like Shopee, which has been successfully eroding its market share by offering more competitive pricing.
- Strategic Investments: The company is lowering the free shipping minimum, which, while increasing short-term costs, is expected to boost overall gross merchandise volume and enhance market competitiveness.
- Future Growth Potential: MercadoLibre is expanding its credit business and investing heavily in artificial intelligence; although this may lead to lower earnings and margins in the short term, these initiatives are anticipated to drive future growth, particularly in the rapidly expanding Latin American e-commerce market.
See More
Kemnay Advisory Services Increases Stake in MercadoLibre
- Share Acquisition Details: Kemnay Advisory Services Inc. increased its position in MercadoLibre by 1,385 shares during Q4 2026, with an estimated trade value of $2.91 million, bringing total holdings to 5,623 shares and reflecting a $1.42 million increase from the previous quarter due to both trading and stock price effects.
- Holding Proportion Analysis: Following this purchase, Kemnay's stake in MercadoLibre represents 1.71% of its 13F AUM, indicating a sustained bullish outlook on the company despite a 3.77% decline in share price over the past year.
- Market Performance Overview: As of February 16, 2026, MercadoLibre shares were priced at $1,988.26, with a market capitalization of $100.80 billion, maintaining rapid revenue growth despite pressures from increased e-commerce competition and rising bad loans.
- Investor Outlook: Kemnay has held MercadoLibre shares since Q2 2020, having previously sold off shares, but has now added shares in each of the last four quarters, suggesting they view the current stock price as an attractive buying opportunity, potentially leading to further purchases in the future.
See More
Kemnay Increases MercadoLibre Holdings by 1,385 Shares
- Share Increase: Kemnay Advisory Services Inc. disclosed a purchase of 1,385 shares of MercadoLibre in Q4 2026, with an estimated trade value of $2.91 million, indicating confidence in the company's prospects.
- Holding Status: As of February 2026, Kemnay's total holdings in MercadoLibre reached 5,623 shares, reflecting a $1.42 million increase from the previous quarter, showcasing a positive market sentiment.
- Market Performance: Despite MercadoLibre's share price declining by 3.77% over the past year and trailing the S&P 500 by 15.56 percentage points, Kemnay's increased stake suggests they view the current price as attractive.
- Investment Opportunity: Since acquiring shares in Q2 2020, Kemnay's recent purchases over the last four quarters may indicate confidence in the company's growth potential, particularly as economic conditions improve in Argentina and Venezuela.
See More
