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    MercadoLibre (NasdaqGS:MELI) Valuation in Focus After Q3 Earnings Reveal Strong Growth, Mixed Profit Signals

    Simply Wall St·11/02/2025 20:25:08
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    MercadoLibre (NasdaqGS:MELI) just released its third-quarter 2025 earnings, showing revenue growth well ahead of expectations but also higher costs that weighed on profits. Investors are weighing these mixed signals after the report.

    See our latest analysis for MercadoLibre.

    MercadoLibre’s share price dipped 1.4% after its latest earnings, reflecting a mix of robust revenue expansion and higher costs weighing on profits. Still, momentum remains positive: the stock has returned nearly 32% year-to-date, and its one-year total shareholder return sits at 13%. The company has delivered an exceptional 148% total return over three years, showing that long-term holders have benefited from its relentless growth focus.

    If MercadoLibre’s resilience and expansion got you thinking bigger, this could be the perfect moment to broaden your search and discover fast growing stocks with high insider ownership

    The question for investors now is whether MercadoLibre’s impressive growth and long-term potential make it undervalued at these levels, or if the stock’s rally means future gains are already priced in. Is there a buying opportunity, or has the market caught up to its growth story?

    Most Popular Narrative: 19.6% Undervalued

    With the narrative fair value at $2,893, MercadoLibre’s share price is notably below what analysts expect. This price gap is drawing attention as revenue surges and platform growth accelerates.

    “Cross-platform integration of commerce, fintech, and advertising, as demonstrated by accelerated ad revenue growth and enhanced tools for sellers, deepens ecosystem stickiness. This reinforces customer lifetime value and delivers operating leverage that can support above-consensus net income and earnings growth.”

    Read the complete narrative.

    Want to see what makes this forecast so bold? The valuation rests on aggressive long-term growth in key financial metrics, numbers some might find eye-catching or even controversial. Discover exactly which financial assumptions are driving the analysts’ confidence and why this narrative suggests a striking upside for MercadoLibre.

    Result: Fair Value of $2,893 (UNDERVALUED)

    Have a read of the narrative in full and understand what's behind the forecasts.

    However, persistent margin pressure and rising credit risks in volatile markets could quickly change sentiment if growth in digital payments or user engagement slows.

    Find out about the key risks to this MercadoLibre narrative.

    Build Your Own MercadoLibre Narrative

    If you see the numbers differently or want to test your own investment view, it’s quick and easy to craft your own narrative using the same data. Do it your way

    A great starting point for your MercadoLibre research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

    Looking for more investment ideas?

    Great opportunities are waiting beyond MercadoLibre. Find stocks with untapped potential, resilient performance, or exposure to breakthrough trends. Open the door to smarter investing today.

    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.