MercadoLibre, Inc. (MELI)
Valuation Overview•Is MercadoLibre, Inc. Overvalued or Undervalued?
Trading at a discount compared to peers, but the underlying intrinsic cash flows struggle to support the current price.
Moderate quality score of 72/100, reflecting stable operating margins and manageable leverage.
Analysts remain bullish, forecasting further upside expansion with consensus targets suggesting solid gains.
Verdict: Solid fundamental quality, though solvency presents a headwind.
Wall Street is highly bullish, projecting significant upside with steady expected earnings growth. However, capital return yields remain modest, driven predominantly by aggressive share repurchases.
MELI exhibits elite business quality, driven by exceptional capital efficiency and highly lucrative margins (highlighted by a massive 20.8% ROIC). However, the balance sheet carries elevated leverage, requiring careful monitoring of debt servicing capabilities.
The company is driving exceptional top-line expansion (38.9% 3Y CAGR) paired with highly explosive earnings growth (60.5% EPS 3Y CAGR). Operating efficiency remains adequate with margins around 9.6%.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $8.8B | +39.1% | +38.9% | +48.7% | +46.1% | |
| EBITDA | $857.0M | — | +36.8% | — | — | |
| Net Income | $417.0M | +4.5% | +60.6% | — | +34.2% | |
| EPS (Diluted) | $8.23 | +4.5% | +60.5% | — | +32.3% | |
| Free Cash Flow | $1.3B | +52.6% | +63.1% | +63.0% | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 43.9% | 46.9% | 46.3% | 49.4% |
| Operating Margin | 9.6% | 12.8% | 10.9% | 7.2% |
| Net Margin | 6.0% | 7.5% | 5.7% | 3.6% |
| FCF Margin | 33.7% | 34.0% | 26.0% | 20.6% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $8.75 | $8.23 | -5.9% | ||
| Q1'26 | $11.45 | $11.03 | -3.7% | ||
| Q4'25 | $9.12 | $8.32 | -8.8% | ||
| Q3'25 | $11.93 | $10.31 | -13.6% | ||
| Q2'25 | $8.27 | $9.74 | +17.8% | ||
| Q1'25 | $10.21 | $12.61 | +23.5% | ||
| Q4'24 | $10.00 | $7.83 | -21.7% | ||
| Q3'24 | $8.53 | $10.48 | +22.9% |
Total return is -31.9% (1Y), lagging the benchmark by -56.9%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | -17.2% | -26.5% | — |
| 1Y | -31.9% | -56.9% | — |
| 3YCAGR | +10.9% | -8.7% | — |
| 5YCAGR | +2.2% | -10.3% | — |
| 10YCAGR | +28.3% | +14.8% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about MercadoLibre, Inc. (MELI) valuation, health, and returns.
MercadoLibre, Inc. is estimated to be overvalued under our discounted cash flow framework. relative multiples indicate the stock is Cheap versus peers compared to industry peers. overvalued (implying -42.9% downside from DCF intrinsic value of $932.87)
MercadoLibre, Inc. has multiple valuation anchors: DCF Intrinsic Value: $932.87 | Peer Relative Fair Value: $5079.64 | Wall Street Analyst Target: $2166.67 (implying +32.5% upside). A convergence of these signals offers higher conviction.
MercadoLibre, Inc. displays good financial health with a composite quality score of 72/100, supported by a Altman Z-Score of 2.5 (grey zone), Piotroski F-Score of 5/9, Return on Invested Capital (ROIC) of 20.8%.
MercadoLibre, Inc. does not return material capital to shareholders via dividends or share repurchases, electing to retain earnings to fund internal growth.
MercadoLibre, Inc.'s current growth trajectory is Stable. The company achieved +39.1% 1Y revenue growth and +4.5% 1Y EPS growth, compared to its 3Y revenue CAGR of +38.9%.
Wall Street consensus is Buy based on 33 analysts, beating EPS expectations in 50% of recent quarters with a -4-quarter streak. The consensus price target represents a +32.5% change from current levels.
Investment risks for MercadoLibre, Inc. include: -40.8% 1-year max drawdown. Volatility risk is characterized by a beta of 1.23x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.