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How's MELI Using Argentina's Economic Recovery to Fuel its Growth?
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Key Takeaways
MercadoLibre is capitalizing on Argentina's recovery by deepening its commerce and fintech presence.
MELI expanded cross-border trade and enhanced product affordability following eased import rules.
Mercado Pago plans to become Argentina's largest digital bank and launch credit cards this year.
MercadoLibre (MELI - Free Report) is leaning into Argentina’s economic revival with growing confidence. The country is showing clear signs of stabilization, with analysts projecting strong GDP growth in 2025 and 2026 as reforms begin to take hold. Inflation is declining, capital controls have been lifted, and the investment climate is improving. Against this backdrop, MercadoLibre has expressed optimism, eyeing long-term growth in the country.
MercadoLibre is strategically expanding its cross-border trade and optimizing its marketplace operations in Argentina, leveraging recent regulatory changes and focusing on key growth areas. MercadoLibre is increasing its focus on the supermarket category within its local marketplace, aiming to increase the share of first-party products offered. The company is also prioritizing affordability of products in the supermarket category, recognizing its importance in the Argentine market.
To offer more products and improve user experience in Argentina, MELI’s financial arm, Mercado Pago, announced that it will apply for a banking license from the Central Bank to build the largest digital bank in the country. This marks a key step as Argentina’s banking industry is undergoing a digital shift, and MELI aims to capture this opportunity with its quality services. MELI also plans to start issuing credit cards in the country in the second half of the year.
Argentina’s revenues grew from $615 million (14.2% of total revenues) in the first quarter of 2024 to $1.38 billion (23.3% of total revenues) in the first quarter of 2025, more than doubling year over year. This turnaround followed a weak 2024 marked by high inflation and currency devaluation. In 2025, macro stabilization enabled MercadoLibre to take advantage of its ecosystem strength. The Zacks Consensus Estimate for second-quarter 2025 Argentina revenues is pegged at $1.46 billion.
MELI’s Competition in the Argentine Market
Argentina is both the birthplace and stronghold of MercadoLibre, yet there are other companies, such as Amazon (AMZN - Free Report) and DLocal (DLO - Free Report) , which are challenging MELI in the country.
Amazon started offering $5 flat-rate international shipping to Argentina. Soon after, it made the shipping free, clearly signaling its intent to grow in Argentina by making U.S. products more accessible to local consumers.
DLocal has announced plans to invest up to $100 million in Argentina and expand its workforce significantly. DLocal is working with Argentine authorities to strengthen its local footprint and drive long-term fintech growth in the country.
MELI’s Share Price Performance, Valuation and Estimates
MELI shares have gained 40.8% in the year-to-date (YTD) period, outperforming the Zacks Internet – Commerce industry and the Zacks Retail-Wholesale sector’s growth of 10.9% and 6.7%, respectively.
MELI’s YTD Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, MELI stock is currently trading at a forward 12-month Price/Sales ratio of 3.87X compared with the industry’s 2.17X. MELI has a Value Score of D.
MELI’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for second-quarter 2025 earnings is pegged at $12.01 per share, which has remained unchanged over the past 60 days, indicating 14.60% year-over-year growth.
Image: Bigstock
How's MELI Using Argentina's Economic Recovery to Fuel its Growth?
Key Takeaways
MercadoLibre (MELI - Free Report) is leaning into Argentina’s economic revival with growing confidence. The country is showing clear signs of stabilization, with analysts projecting strong GDP growth in 2025 and 2026 as reforms begin to take hold. Inflation is declining, capital controls have been lifted, and the investment climate is improving. Against this backdrop, MercadoLibre has expressed optimism, eyeing long-term growth in the country.
MercadoLibre is strategically expanding its cross-border trade and optimizing its marketplace operations in Argentina, leveraging recent regulatory changes and focusing on key growth areas. MercadoLibre is increasing its focus on the supermarket category within its local marketplace, aiming to increase the share of first-party products offered. The company is also prioritizing affordability of products in the supermarket category, recognizing its importance in the Argentine market.
To offer more products and improve user experience in Argentina, MELI’s financial arm, Mercado Pago, announced that it will apply for a banking license from the Central Bank to build the largest digital bank in the country. This marks a key step as Argentina’s banking industry is undergoing a digital shift, and MELI aims to capture this opportunity with its quality services. MELI also plans to start issuing credit cards in the country in the second half of the year.
Argentina’s revenues grew from $615 million (14.2% of total revenues) in the first quarter of 2024 to $1.38 billion (23.3% of total revenues) in the first quarter of 2025, more than doubling year over year. This turnaround followed a weak 2024 marked by high inflation and currency devaluation. In 2025, macro stabilization enabled MercadoLibre to take advantage of its ecosystem strength. The Zacks Consensus Estimate for second-quarter 2025 Argentina revenues is pegged at $1.46 billion.
MELI’s Competition in the Argentine Market
Argentina is both the birthplace and stronghold of MercadoLibre, yet there are other companies, such as Amazon (AMZN - Free Report) and DLocal (DLO - Free Report) , which are challenging MELI in the country.
Amazon started offering $5 flat-rate international shipping to Argentina. Soon after, it made the shipping free, clearly signaling its intent to grow in Argentina by making U.S. products more accessible to local consumers.
DLocal has announced plans to invest up to $100 million in Argentina and expand its workforce significantly. DLocal is working with Argentine authorities to strengthen its local footprint and drive long-term fintech growth in the country.
MELI’s Share Price Performance, Valuation and Estimates
MELI shares have gained 40.8% in the year-to-date (YTD) period, outperforming the Zacks Internet – Commerce industry and the Zacks Retail-Wholesale sector’s growth of 10.9% and 6.7%, respectively.
MELI’s YTD Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, MELI stock is currently trading at a forward 12-month Price/Sales ratio of 3.87X compared with the industry’s 2.17X. MELI has a Value Score of D.
MELI’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for second-quarter 2025 earnings is pegged at $12.01 per share, which has remained unchanged over the past 60 days, indicating 14.60% year-over-year growth.
MercadoLibre, Inc. Price and Consensus
MercadoLibre, Inc. price-consensus-chart | MercadoLibre, Inc. Quote
MercadoLibre currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.