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MELI Grew 49%. The Stock Is Down 39% Over the Past Year.

There is a version of the MercadoLibre story that is easy to tell. Revenue up 49%. Fastest growth rate since 2022. Stock down 39% over the past year. Those three facts in sequence are enough to make most people take a second look. What is harder to tell is whether the gap between the business and the stock reflects a genuine opportunity or a market that sees something the revenue line does not.

Both are possible here. And that is actually the most honest framing going into this.

On May 7th, MercadoLibre reported Q1 2026 results. Revenue hit $8.85 billion, up 49% year-over-year, beating the consensus estimate of $8.29 billion by roughly 6.8%. Operating income came in at $611 million, down nearly 20% from a year ago. Operating margin compressed 600 basis points to 6.9%, from 12.6% in Q1 2025. EPS landed at $8.23. Depending on which estimate you use, that was either a slight miss or roughly in line. InvestingPro had the figure at $9.37 going in, which is the number that generated the loudest post-earnings reaction. TradingView’s consensus was $8.50. Quiver had $8.83. The spread across sources is wide, which matters because the “miss” was partly a function of which estimate desk you trusted. The one thing that is not in dispute: the stock dropped 11.3% in after-hours trading on May 7th and continued lower in the days that followed.

Management’s explanation on the earnings call was direct. The credit book grew 87% year-over-year to $14.6 billion, well ahead of the 49% revenue growth rate. The credit card portfolio specifically more than doubled, up 104% to $6.6 billion, with 2.7 million new cards issued in a single quarter. Accounting rules require companies to book full expected loss provisions immediately when a credit card is issued, before a single dollar of interest income is earned. That accounting treatment creates a front-loaded drag on profitability that has nothing to do with whether those cards will be profitable over time. Provisions for doubtful accounts jumped to $1.244 billion in Q1, up from $603 million a year ago. That alone is a large part of the margin story. Management said plainly on the call that they believe this approach will maximize long-term cash flow and lead to significantly higher margins over time. Whether that plays out depends on cohort maturation, which takes time.

The operational numbers underneath the margin line:

• Revenue: $8.85B, up 49% YoY – fastest pace since Q2 2022
• Total Payment Volume: $87.2B, up 50% YoY
• Gross Merchandise Volume: $19.0B, up 42% YoY
• Items Sold: up 45% YoY in Brazil; global acceleration driven by free shipping threshold change
• Unique Active Buyers: 84.1M, up 26% YoY
• Fintech Monthly Active Users: 82.9M, up 29% YoY
• Credit Portfolio: $14.6B, up 87% YoY
• Credit Card Portfolio: $6.6B, up 104% YoY
• Advertising Revenue: up 73% YoY
• Assets Under Management: nearly $20B, up 77% YoY
• Net Income: $417M, 4.7% margin
• Adjusted Free Cash Flow: -$56M (negative for the quarter)
• Net Debt: $5.748B
• EPS: $8.23 (vs. $9.74 in Q1 2025)

The AUM-to-MAU spread keeps standing out. Assets under management grew 77% while fintech monthly active users grew 29%. That 48-point gap suggests existing Mercado Pago users are deploying materially more capital through the platform. Engagement deepening ahead of user growth is the kind of signal that tends to compound in revenue-per-user figures later. It is not a flashy metric. Most people skip it. It might be the most important one in the deck.

Slight tangent worth noting: Argentina’s NPL rates actually improved sequentially this quarter, despite macroeconomic volatility. Management attributed this to short loan durations and high user engagement. They are now aggressively rolling out credit cards in Argentina, and noted that early cohort behavior is mirroring the initial Brazil rollout. If that parallel holds, it implies the same margin pressure and the same eventual recovery timeline. That is either reassuring or it means the margin drag extends geographically before it resolves. Probably both.

Where the stock is and what analysts think.

MELI is trading around $1,667 as of May 22, 2026. The 52-week range runs from $1,495 to $2,645. The all-time high closing price was $2,613.63 on June 30, 2025. The stock is down roughly 37% from that level. The 200-day moving average sits near $2,074, which is now approximately 24% above the current price and acting as overhead resistance. Key support according to technical analysts is around $1,520.

Post-earnings analyst moves: Goldman Sachs cut to $2,100 from $2,440, maintaining Buy. Morgan Stanley lowered to $2,450 from $2,600, maintaining Overweight. Barclays trimmed to $2,300 from $2,500, maintaining Overweight. BTIG moved to $2,150 from $2,400, maintaining Buy. Raymond James cut to $2,000 from $2,250, maintaining Strong Buy. Benchmark lowered to $2,380 from $2,780, maintaining Buy. BofA Securities cut to $2,400 from $3,000. JPMorgan lowered to $1,900 from $2,100, Neutral. UBS cut to $1,750 from $2,050, Neutral. Citi downgraded to Neutral with a $1,950 target. Daiwa downgraded to Hold. Across 25 analysts, the consensus average target sits at $2,230, implying roughly 34% upside. 21 analysts carry a Buy or equivalent rating. Zero sell ratings.

What’s interesting is the P/E context. The current trailing P/E is approximately 47x. The 5-year median is 77.8x. A business growing revenue at 49% annually, with a credit card portfolio that doubled in one quarter, is trading at a multiple that is roughly 40% below its own historical median. GuruFocus assigns a GF Score of 87 out of 100 and a perfect growth rank of 10 out of 10. The momentum rank is 4 out of 10. That last number is the honest part. The stock has lagged earnings per share growth significantly. Over three years, EPS has grown at 35% annually. The stock has appreciated about 8% annually over the same period. That is either a lag that closes or a signal that the market has been consistently skeptical of margin sustainability. Both readings have merit.

The risk worth tracking every quarter is not operating margin compression, which is intentional. It is net interest margin on the lending portfolio. NIM fell from 22.7% to 17.8% year-over-year. Management attributed roughly half of that to the higher mix of credit cards, and the rest to extended loan terms and portfolio expansion in Brazil. Seasonality plays a role too. Q1 historically sees lower NIM. The question is whether the sequential compression stabilizes through Q2 and Q3 as cohorts age, or whether it continues widening as new card issuance in Argentina accelerates.

The next earnings report is scheduled for early August 2026. Consensus estimates for Q2 call for EPS of $10.85 on revenue of $9.16 billion. That would be a meaningful step up from Q1 on both lines. Management signaled confidence in the second half. Whether the cohort maturation math actually starts showing up in the margin numbers by then is the open question. And it is going to stay open until the August report comes in.