MercadoLibre Inc. (MELI) delivered a stunning fourth-quarter performance, smashing analyst expectations and sending its stock soaring.
The Latin America’s e-commerce and fintech leader, delivered a record-breaking performance in the fourth quarter of 2024, surpassing market expectations. Net income for the quarter reached $639 million, significantly exceeding analyst projections. Revenue for the quarter hit $6.1 billion, boosting investor confidence and sending shares up over 12% in early trading, currently at 2304 (+9.2%).
This impressive finish to the year comes after a turbulent third quarter, where increased investments in logistics and credit led to a short-term dip in profitability. However, the company has rebounded strongly, with its stock gaining 37% year-to-date and reinforcing its position as Latin America’s most valuable company, boasting a market capitalization of approximately $119 billion.
“This was probably the best year in our history in terms of financial results, operational results, [and] the improvements that we have made on the product,” said Chief Financial Officer Martin de los Santos.
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“This was probably the best year in our history in terms of financial results, operational results, [and] the improvements that we have made on the product,” said Chief Financial Officer Martin de los Santos.
Strength Across Key Markets and Business Segments
MercadoLibre’s 2024 full-year results underscore its dominant position in the region. The company reported annual revenue of $21 billion, a 38% increase from the prior year, and a net profit of $1.9 billion. Free cash flow exceeded $1 billion, reflecting the firm’s ability to grow profitably while making strategic investments.
Despite a slight miss on gross merchandise volume (GMV), which came in at $14.5 billion for the fourth quarter, MercadoLibre’s total payment volume (TPV) of $59 billion aligned with expectations. Its fintech ecosystem continues to expand rapidly, with 60 million monthly active users and 5.9 million new credit cards issued in 2024.
Brazil, Mexico, and Argentina remain the company’s core markets, with Brazil leading in fintech adoption. However, executives remain cautious about credit expansion due to macroeconomic uncertainty, particularly in Brazil, where interest rates are expected to climb. Argentina, on the other hand, has seen an explosion in MercadoLibre’s credit portfolio, growing fourfold over the past year.
MercadoLibre’s 2024 full-year results underscore its dominant position in the region. The company reported annual revenue of $21 billion, a 38% increase from the prior year, and a net profit of $1.9 billion. Free cash flow exceeded $1 billion, reflecting the firm’s ability to grow profitably while making strategic investments.
Despite a slight miss on gross merchandise volume (GMV), which came in at $14.5 billion for the fourth quarter, MercadoLibre’s total payment volume (TPV) of $59 billion aligned with expectations. Its fintech ecosystem continues to expand rapidly, with 60 million monthly active users and 5.9 million new credit cards issued in 2024.
Brazil, Mexico, and Argentina remain the company’s core markets, with Brazil leading in fintech adoption. However, executives remain cautious about credit expansion due to macroeconomic uncertainty, particularly in Brazil, where interest rates are expected to climb. Argentina, on the other hand, has seen an explosion in MercadoLibre’s credit portfolio, growing fourfold over the past year.
Balancing Expansion with Caution
While MercadoLibre’s aggressive investments in logistics, financial services, and advertising have fueled growth, they also bring margin pressures. The company has expanded its fulfillment network and enhanced its free shipping options, attracting a record number of new buyers. Meanwhile, its advertising segment—one of the fastest-growing areas of the business—rose 41% year-on-year, reaching 2.1% of GMV.
However, challenges remain. Rising interest rates in Brazil and regulatory complexities in Mexico could impact credit expansion. The company has tightened credit issuance in certain segments to mitigate risk, ensuring that repayment behaviors align with expectations.
Goldman Sachs analysts noted that MercadoLibre is investing for sustainable long-term growth, which could introduce quarter-to-quarter volatility but should ultimately drive margin expansion over time.
While MercadoLibre’s aggressive investments in logistics, financial services, and advertising have fueled growth, they also bring margin pressures. The company has expanded its fulfillment network and enhanced its free shipping options, attracting a record number of new buyers. Meanwhile, its advertising segment—one of the fastest-growing areas of the business—rose 41% year-on-year, reaching 2.1% of GMV.
However, challenges remain. Rising interest rates in Brazil and regulatory complexities in Mexico could impact credit expansion. The company has tightened credit issuance in certain segments to mitigate risk, ensuring that repayment behaviors align with expectations.
Goldman Sachs analysts noted that MercadoLibre is investing for sustainable long-term growth, which could introduce quarter-to-quarter volatility but should ultimately drive margin expansion over time.
Investor Sentiment and Future Outlook
Investor confidence in MercadoLibre remains strong. The company has 25 buy recommendations, one hold, and only one sell, with a 12-month price target of $2,410 per share—higher than its latest trading price of $2,325. Several analysts raised their targets following the earnings release, highlighting MercadoLibre’s resilience and ability to execute its long-term vision.
MercadoLibre’s strategic initiatives, including the MELI+ loyalty program, in-network credit card expansion, and advertising growth, position it well for continued dominance in Latin America’s digital economy. With 67 million unique active buyers and engagement metrics at record levels, the company has demonstrated that it can translate investments into sustained revenue and profit growth.
As geopolitical and economic conditions evolve, MercadoLibre’s deep market penetration and proven ability to navigate challenges reinforce its status as one of the most compelling growth stories in the global e-commerce and fintech sectors.
Investor confidence in MercadoLibre remains strong. The company has 25 buy recommendations, one hold, and only one sell, with a 12-month price target of $2,410 per share—higher than its latest trading price of $2,325. Several analysts raised their targets following the earnings release, highlighting MercadoLibre’s resilience and ability to execute its long-term vision.
MercadoLibre’s strategic initiatives, including the MELI+ loyalty program, in-network credit card expansion, and advertising growth, position it well for continued dominance in Latin America’s digital economy. With 67 million unique active buyers and engagement metrics at record levels, the company has demonstrated that it can translate investments into sustained revenue and profit growth.
As geopolitical and economic conditions evolve, MercadoLibre’s deep market penetration and proven ability to navigate challenges reinforce its status as one of the most compelling growth stories in the global e-commerce and fintech sectors.
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