MercadoLibre, Inc. (MELI): A Bull Case Theory

We came across a bullish thesis on MercadoLibre, Inc. (MELI) on Substack by Oliver | MMMT Wealth. In this article, we will summarize the bulls’ thesis on MELI. MercadoLibre, Inc. (MELI)’s share was trading at $1758.77 as of Jan 10^th. MELI’s trailing and forward P/E were 62.39 and 40 respectively according to Yahoo Finance.

MercadoLibre (MELI) is poised for significant growth, driven by the rapidly expanding e-commerce market in Latin America, which is projected to reach $350 billion by 2027. MELI currently holds a 29.2% market share, expected to grow to 30% as weaker competitors fade and the company continues to make aggressive investments. With a 30% market share in a $350 billion market, MELI’s e-commerce revenue could reach $37 billion, representing a potential revenue growth of approximately 35%. Based on a sales multiple of 3.8x, MELI’s e-commerce business alone could achieve an enterprise value (EV) of $140 billion by 2027, up from its current total EV of $90 billion. The company’s MercadoPago division is also performing well, with 1.5 million new credit cards issued in Q3 2024, most of which are to first-time credit card users. This segment presents substantial growth potential as digital banking continues to gain traction across the region. With a net income margin of 7.5% and a price-to-earnings growth (PEG) ratio of 1.7x, MELI offers an attractive investment opportunity. If these trends continue, MELI is well-positioned to capture significant value in the coming years, supported by its dominant market position and the expanding digital banking landscape.

MercadoLibre, Inc. (MELI) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 87 hedge fund portfolios held MELI at the end of the third quarter which was 84 in the previous quarter. While we acknowledge the risk and potential of MELI as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than MELI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.