Will These 3 Brands Make a Major Retail Comeback in 2026?
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5 days ago
0mins
Should l Buy MELI?
Source: Marketbeat
Market Performance Overview: Some top-performing stocks have outpaced the broader market, with notable gains from companies like Valaris PLC, which has risen 80% since the start of the year, despite the S&P 500 being up less than 1% year-to-date.
Investment Focus: Investors are increasingly concerned with future performance rather than past returns, with three retail companies showing potential for growth, suggesting they may be worth watching as 2026 approaches.
Mercado Libre's Growth: Mercado Libre Inc. has rapidly expanded its buyer base and revenue, achieving a 39% year-over-year increase, and is expected to double its e-commerce business in the coming years, driven by structural advantages in the Latin American market.
Chewy's Resilience: Despite recent challenges, Chewy Inc. has seen a rise in sales and profitability, with a significant increase in gross margin and cash flow, indicating potential for continued growth in the pet e-commerce sector.
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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: 1777.000
Low
2500
Averages
2783
High
2950
Current: 1777.000
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 Reports Strong Growth Amid Earnings Miss
- Significant Revenue Growth: MercadoLibre's Q4 revenue increased by 47% year-over-year, showcasing strong market performance despite an 18% decline in overall stock price, maintaining its leadership position in the Latin American e-commerce sector.
- Active User Increase: By lowering the free shipping threshold in Brazil from 79 reals to 19 reals, MercadoLibre saw a 26% increase in active buyers, indicating enhanced platform attractiveness, although less than a third of customers transacted, leaving substantial growth potential.
- Fintech Expansion: The fintech segment experienced a 27% rise in monthly active users and a 78% increase in assets under management, with MercadoLibre planning to establish full-service banks in Mexico and Argentina, aiming to become the largest digital bank in each country amidst high barriers in the Brazilian banking system.
- Profitability Challenges: Despite strong revenue and user growth, MercadoLibre reported Q4 earnings per share of $11.03, missing the market expectation of $11.44, with operating income slightly rising to $889 million but operating margin declining from 13.5% to 10.1%, as management indicated a focus on long-term success over short-term profit.
See More
Mercado Libre CFO Discusses Q4 Performance Insights
- Investment Strategy Analysis: CFO Martin de los Santos emphasizes in the latest podcast episode that despite low e-commerce penetration in Latin America, Mercado Libre will continue investing to enhance its competitive moat, reflecting confidence in long-term growth.
- Market Opportunity Assessment: De los Santos highlights that the fintech sector in Latin America remains largely underserved, asserting that investments in this area will lay the groundwork for future market expansion, even as short-term margins may be compressed.
- Profitability Outlook: He notes that despite pressures on profitability, Mercado Libre prioritizes accelerating growth opportunities over short-term margin optimization, a strategy that will help the company maintain its leading position in a competitive market.
- Company Background Overview: Founded in 1999, Mercado Libre is the leading e-commerce and fintech platform in Latin America, operating in 18 countries and dedicated to facilitating access to commerce and financial services through comprehensive solutions.
See More
MercadoLibre and Others Show Strong Growth Potential
- MercadoLibre Growth Momentum: Over the past decade, MercadoLibre's stock has surged more than 1,500%, and despite a recent pullback bringing its valuation to the lowest level in ten years, it remains a dominant player in Latin America's e-commerce and fintech markets, making it an attractive investment opportunity.
- Coupang Expansion Potential: As the leader in South Korea's e-commerce market, Coupang is demonstrating the potential to profitably expand into countries like Taiwan; despite a 21% year-to-date stock decline, its sales multiple is only 1, indicating significant upside potential in the coming years.
- Airbnb Market Outlook: Since its inception in 2007, Airbnb has served over 5 million hosts and 2.5 million guests, and while its stock has been range-bound, it offers solid value at 18 times free cash flow, especially as the global travel market continues to grow.
- AI Technology Utilization: Airbnb's custom AI agent currently handles about one-third of customer support issues, leveraging a vast pool of data from 200 million verified identities and 500 million reviews, enhancing operational efficiency and profit margins, showcasing its unique competitive advantage.
See More
Three Undervalued Stocks to Consider for Investment
- MercadoLibre's Growth Potential: Over the past decade, MercadoLibre's stock has surged more than 1,500%, but recent pullbacks have brought its valuation to the lowest level in ten years; despite a dip in profit margins, the expansion of its high-margin fintech services is expected to drive long-term growth.
- Coupang's Market Leadership: As the leader in South Korea's e-commerce market, Coupang's stock has fallen 21% year-to-date, yet its triple-digit revenue growth in Taiwan demonstrates the successful adaptability of its business model, indicating potential for profitable expansion.
- Airbnb's Capital-Light Model: Airbnb generates $12.3 billion in annual revenue, translating to $4.6 billion in free cash flow, reflecting a high free cash flow margin of 37%, with investments in AI expected to further enhance profitability.
- Market Opportunities and Investment Value: These three companies exhibit strong growth potential in their respective sectors, and despite facing short-term challenges, their undervaluation presents a compelling buying opportunity for patient investors, particularly in the context of a global economic recovery.
See More
Key Signals for MercadoLibre's Future Growth
- Margin Trend Monitoring: While MercadoLibre has seen strong revenue growth in recent years, the critical factor is whether it can translate scale into operating leverage, particularly as it defends market share in Brazil through free shipping and logistics expansion, which pressures margins; if margins recover in the future, it will indicate that its ecosystem still possesses structural leverage.
- Importance of Credit Discipline: Mercado Pago has become a central part of the investment thesis, and while loan growth is crucial, loan quality is even more important; stable delinquency rates and aligned provisioning will strengthen its moat, whereas spikes in losses during economic downturns could amplify earnings volatility.
- Need for Competitive Rationality: Competition in Latin America has intensified, and investors should watch for signs of reduced promotional intensity and economically rational industry behavior; MercadoLibre requires a competitive environment that supports sustainable margins rather than eliminating competitors.
- Long-term Investment Signal Recognition: In the next three years, MercadoLibre is likely to maintain dominance in scale, but scale alone does not guarantee strong economics; margins, credit discipline, and competitive behavior will determine whether it emerges as a durable compounder.
See More
Key Signals for MercadoLibre's Future Growth
- Profitability Trends: While MercadoLibre has seen strong revenue growth in recent years, the critical factor is whether it can translate scale into profitability, particularly as free shipping and aggressive promotions in Brazil may pressure margins.
- Credit Quality Monitoring: The quality of loans from Mercado Pago has become a significant part of the investment thesis, necessitating attention to delinquency rates' stability during economic fluctuations to ensure credit discipline does not lead to spikes in losses during downturns.
- Competitive Environment Changes: Increased competition in the Latin American market from emerging players like Shopee and Shein makes profitability crucial, and investors should watch for signs of moderating promotional intensity and rational industry behavior to support sustainable margins.
- Long-term Investment Signals: Over the next three years, investors need to closely monitor signals such as margins, credit discipline, and competitive behavior to determine whether MercadoLibre can maintain its market dominance in a challenging environment.
See More
MercadoLibre Reports Strong Growth Amid Earnings Miss
- Significant Revenue Growth: MercadoLibre's Q4 revenue increased by 47% year-over-year, showcasing strong market performance despite an 18% decline in overall stock price, maintaining its leadership position in the Latin American e-commerce sector.
- Active User Increase: By lowering the free shipping threshold in Brazil from 79 reals to 19 reals, MercadoLibre saw a 26% increase in active buyers, indicating enhanced platform attractiveness, although less than a third of customers transacted, leaving substantial growth potential.
- Fintech Expansion: The fintech segment experienced a 27% rise in monthly active users and a 78% increase in assets under management, with MercadoLibre planning to establish full-service banks in Mexico and Argentina, aiming to become the largest digital bank in each country amidst high barriers in the Brazilian banking system.
- Profitability Challenges: Despite strong revenue and user growth, MercadoLibre reported Q4 earnings per share of $11.03, missing the market expectation of $11.44, with operating income slightly rising to $889 million but operating margin declining from 13.5% to 10.1%, as management indicated a focus on long-term success over short-term profit.
See More
Mercado Libre CFO Discusses Q4 Performance Insights
- Investment Strategy Analysis: CFO Martin de los Santos emphasizes in the latest podcast episode that despite low e-commerce penetration in Latin America, Mercado Libre will continue investing to enhance its competitive moat, reflecting confidence in long-term growth.
- Market Opportunity Assessment: De los Santos highlights that the fintech sector in Latin America remains largely underserved, asserting that investments in this area will lay the groundwork for future market expansion, even as short-term margins may be compressed.
- Profitability Outlook: He notes that despite pressures on profitability, Mercado Libre prioritizes accelerating growth opportunities over short-term margin optimization, a strategy that will help the company maintain its leading position in a competitive market.
- Company Background Overview: Founded in 1999, Mercado Libre is the leading e-commerce and fintech platform in Latin America, operating in 18 countries and dedicated to facilitating access to commerce and financial services through comprehensive solutions.
See More
MercadoLibre and Others Show Strong Growth Potential
- MercadoLibre Growth Momentum: Over the past decade, MercadoLibre's stock has surged more than 1,500%, and despite a recent pullback bringing its valuation to the lowest level in ten years, it remains a dominant player in Latin America's e-commerce and fintech markets, making it an attractive investment opportunity.
- Coupang Expansion Potential: As the leader in South Korea's e-commerce market, Coupang is demonstrating the potential to profitably expand into countries like Taiwan; despite a 21% year-to-date stock decline, its sales multiple is only 1, indicating significant upside potential in the coming years.
- Airbnb Market Outlook: Since its inception in 2007, Airbnb has served over 5 million hosts and 2.5 million guests, and while its stock has been range-bound, it offers solid value at 18 times free cash flow, especially as the global travel market continues to grow.
- AI Technology Utilization: Airbnb's custom AI agent currently handles about one-third of customer support issues, leveraging a vast pool of data from 200 million verified identities and 500 million reviews, enhancing operational efficiency and profit margins, showcasing its unique competitive advantage.
See More
Three Undervalued Stocks to Consider for Investment
- MercadoLibre's Growth Potential: Over the past decade, MercadoLibre's stock has surged more than 1,500%, but recent pullbacks have brought its valuation to the lowest level in ten years; despite a dip in profit margins, the expansion of its high-margin fintech services is expected to drive long-term growth.
- Coupang's Market Leadership: As the leader in South Korea's e-commerce market, Coupang's stock has fallen 21% year-to-date, yet its triple-digit revenue growth in Taiwan demonstrates the successful adaptability of its business model, indicating potential for profitable expansion.
- Airbnb's Capital-Light Model: Airbnb generates $12.3 billion in annual revenue, translating to $4.6 billion in free cash flow, reflecting a high free cash flow margin of 37%, with investments in AI expected to further enhance profitability.
- Market Opportunities and Investment Value: These three companies exhibit strong growth potential in their respective sectors, and despite facing short-term challenges, their undervaluation presents a compelling buying opportunity for patient investors, particularly in the context of a global economic recovery.
See More
Key Signals for MercadoLibre's Future Growth
- Margin Trend Monitoring: While MercadoLibre has seen strong revenue growth in recent years, the critical factor is whether it can translate scale into operating leverage, particularly as it defends market share in Brazil through free shipping and logistics expansion, which pressures margins; if margins recover in the future, it will indicate that its ecosystem still possesses structural leverage.
- Importance of Credit Discipline: Mercado Pago has become a central part of the investment thesis, and while loan growth is crucial, loan quality is even more important; stable delinquency rates and aligned provisioning will strengthen its moat, whereas spikes in losses during economic downturns could amplify earnings volatility.
- Need for Competitive Rationality: Competition in Latin America has intensified, and investors should watch for signs of reduced promotional intensity and economically rational industry behavior; MercadoLibre requires a competitive environment that supports sustainable margins rather than eliminating competitors.
- Long-term Investment Signal Recognition: In the next three years, MercadoLibre is likely to maintain dominance in scale, but scale alone does not guarantee strong economics; margins, credit discipline, and competitive behavior will determine whether it emerges as a durable compounder.
See More
Key Signals for MercadoLibre's Future Growth
- Profitability Trends: While MercadoLibre has seen strong revenue growth in recent years, the critical factor is whether it can translate scale into profitability, particularly as free shipping and aggressive promotions in Brazil may pressure margins.
- Credit Quality Monitoring: The quality of loans from Mercado Pago has become a significant part of the investment thesis, necessitating attention to delinquency rates' stability during economic fluctuations to ensure credit discipline does not lead to spikes in losses during downturns.
- Competitive Environment Changes: Increased competition in the Latin American market from emerging players like Shopee and Shein makes profitability crucial, and investors should watch for signs of moderating promotional intensity and rational industry behavior to support sustainable margins.
- Long-term Investment Signals: Over the next three years, investors need to closely monitor signals such as margins, credit discipline, and competitive behavior to determine whether MercadoLibre can maintain its market dominance in a challenging environment.
See More
