I’ve been holding MELI since Q1 2019. During that time the PS has ranged from a high of 16.9 (Q3 2019) to a new low today at 3.0. Have any catastrophes occurred? Nope.
But here’s the Q4 2025 key metrics:
Total Revenue 8.759 B, up 45%
Gross Merchandize Volume , up 37%
Fintech Total Payment Volume, up 42%
Gross Profit Margin 43.2%, down from 46.7% at the beginning of 2025.
Bad Debt up from 6.8% last quarter up to 7.6% (within normal variations)
The key item is the lower margins. This has been from a reduction in the order size required for free shipping. Also there is slightly more bad debt. I think these margin pressures will gradually subside, and to pay PS 3.0 for a company growing revenue at 45%, is, indeed, a very low price to pay. To be clear, the reduced margin pushed non-GAAP earnings per share from $12.61 a year ago to $11.03 today. Short term, we also have the potential for economic impact from US tariffs.
MELI is down about 10% as I write this. Long-term, revenue durability, expanding businesses, and favorable demographic trends should push MELI higher. I expect this to be the low point for the year. I won’t add MELI to my portfolio because it’s already 17.6% of my holdings, but if I didn’t own it, I’d buy SUBSTANTIAL amounts of it today.
Brian Stoffel has a short video on MELI earnings today:
TL:DW:
Meli is investing heavily in its business, which drove up costs 50% more than last year.
It was his largest position, he hasn’t sold, but the decline in stock price makes it his #3 position now.
Listening to Stoffel, it sounds like what Amazon did when it was ramping its eCommerce business, plowing profits back into the business to help it continue to grow and reinforce its moat.
I have owned MELI since 2012 in my account and my kids accounts with +10x returns. It has been one of my foundation stocks for years. But last month I sold all of it. Why? MELI has been dead money for 2 years and margins/profits have sagged. I am not sure their expansion can continue at the same rate as in the past. And what will be their capex for AI? IMO there are better places to put your money in our current downturn. Bargains are now galore.
But I think it is best that I think twice. There are upcoming elections in Brazil in the summer. Lula da Silva is the current president and is a bit of a socialist. If Lulu loses the election, Brazilian stocks could get a big boost. Also, if the USD continues to weaken, this will make the MELI numbers (reported in USD) look better.
My Latin preference is Brazilian company NU Bank because it is next making a global expansion into the US and maybe Europe. MELI is restricted to only Latin American countries. NU has doubled for me in 2 years. But yes, NU has sagged the last 6 months. Growth and margins are ballpark similar to MELI. Mr. Market has ignored NUs successful expansion into Mexico and Columbia and the power of its platform services. The NU business model is very similar to SOFI which I also hold. These are my two fintech bets for 2026.
NU Bank’s earnings are out later today and I’ll be listening closely.
