MELI Should I Buy
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MercadoLibre Inc (MELI) is currently not a strong buy for a beginner investor with a long-term strategy. While the company demonstrates strong revenue growth and fintech performance, its declining net income, EPS, and gross margin, coupled with bearish technical indicators, suggest caution. Additionally, the lack of strong trading signals and mixed analyst sentiment further support a hold recommendation.
The stock is showing bearish technical indicators. The MACD is negatively expanding, RSI indicates the stock is oversold at 19.245, and moving averages are bearish (SMA_200 > SMA_20 > SMA_5). The stock is trading near its support level (S1: 1722.752), with resistance levels significantly higher (R1: 2073.932).
Strong revenue growth of 44.56% YoY in Q4
Positive performance in fintech with 40% acquiring TPV growth and 90% credit portfolio growth.
SQUADRA Investments' acquisition of a significant stake in the company, reflecting institutional confidence.
Declining net income (-12.52% YoY) and EPS (-12.46% YoY) in Q4
Gross margin dropped by 4.78% YoY.
Mixed analyst sentiment with lowered price targets and concerns about the company's investment cycle and profitability.
Bearish technical indicators and oversold conditions.
In Q4 2025, MercadoLibre reported a 44.56% YoY increase in revenue to $8.76 billion. However, net income dropped by 12.52% YoY to $559 million, and EPS fell by 12.46% YoY to $11.03. Gross margin also declined to 43.2%, down 4.78% YoY.
Analysts maintain a generally positive outlook but have lowered price targets recently. BTIG, Cantor Fitzgerald, Wedbush, and Barclays all reduced their targets, citing mixed results and concerns about the company's investment cycle. JPMorgan upgraded the stock to Overweight, citing valuation and reduced competitive risks.
