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The Zacks Consensus Estimate for third-quarter revenues is pegged at $7.25 billion, suggesting year-over-year growth of 36.55%. The consensus mark for earnings is pegged at $9.43 per share. The estimate indicates year-over-year growth of 20.43%.
MELI Earnings Surprise History
MELI’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, the average surprise being 14%.
According to the Zacks model, the combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here.
MELI has an Earnings ESP of -0.21% and a Zacks Rank #4 (Sell) at present.
Top-Line Growth Estimates for Q3
The Zacks Consensus Estimate for third-quarter 2025 Argentina revenues is pegged at $1.56 billion, suggesting an increase of 51.4% from the figure reported in the year-ago quarter.
The consensus mark for Brazil revenues is pinned at $3.92 billion, indicating an increase of 34.5% from the figure reported in the year-ago quarter.
The consensus mark for Mexico revenues is pinned at $1.67 billion, indicating a 45.7% increase from the figure reported in the year-ago quarter.
The Zacks Consensus Estimate for revenues from other countries is pegged at $293.12 million, suggesting a 32.6% increase from the figure reported in the year-ago quarter.
Factors Shaping Upcoming Results of MELI
MercadoLibre is expected to have entered the third quarter of 2025 with concerning momentum despite delivering 34% year-over-year revenue growth in the prior quarter, as the operating margin contraction of 210 basis points implied rising profitability strain. The June expansion of Brazil’s free shipping program — cutting the minimum threshold from BRL79 to BRL19 — is likely to have continued eroding margins through the quarter to be reported, driven by higher fulfilment and subsidy costs. Elevated marketing expenses are expected to have persisted as the company defended its share against intensifying competition from Amazon ((AMZN - Free Report) ), Sea Limited ((SE - Free Report) ) and Nubank ((NU - Free Report) ).
Competitive dynamics across Latin America are expected to have remained intense, shaping a more challenging backdrop for MELI. In Brazil, Amazon’s continued logistics buildout likely enhanced delivery speed and product breadth, narrowing MELI’s advantage in convenience and assortment. Sea Limited’s Shopee platform is expected to have sustained strong traction through aggressive discounting and interactive shopping tools, likely diverting lower-ticket purchases and weighing on take rates and order values. Meanwhile, Nubank’s expanding financial ecosystem across credit cards, payments and investments is expected to have intensified pressure on Mercado, limiting engagement and share gains in Brazil and Mexico.
Political and macroeconomic conditions are expected to have further complicated MELI’s performance. In Argentina, corruption allegations involving President Milei’s administration likely heightened uncertainty and weakened consumer sentiment, while depreciation of the peso and real is expected to have pressured reported revenue and inflated FX losses. Higher local interest rates likely curbed credit expansion, and the persistently elevated 18% non-performing loan ratio over 90 days is expected to have sustained asset quality concerns.
Despite all these pressures expected to weigh on the quarter under review, MercadoLibre’s continuous efforts to deepen customer engagement through enhanced logistics, targeted marketing and product diversification are expected to have supported revenue momentum. Even though rising credit risk remains a concern, the company’s strong advertising traction, growing base of fintech users, and sustained strength in Brazil and Mexico likely contributed positively to top-line growth. MELI’s third-quarter performance is expected to reflect steady operational momentum across commerce and fintech, though overall efficiency and margins are likely to have remained constrained. Persistent macro volatility, tighter financial conditions, and heightened regional competition are expected to have limited the extent of profitability recovery despite sustained revenue growth.
MELI Price Performance & Stock Valuation
MercadoLibre’s shares have advanced 27.1% year to date, outpacing the Retail-Wholesale sector’s 7.1% increase and the S&P 500’s 16.6% rise. In comparison, Amazon has added 2.2%, while Sea Limited and Nubank have delivered stronger returns of 45.8% and 52.9%, respectively. The performance, though strong, trails key regional peers, suggesting that persistent margin pressures and intensifying regional competition may have limited the stock’s relative momentum.
MELI’s YTD Price Performance
Image Source: Zacks Investment Research
Compared to the broader Zacks Internet–Commerce industry, MELI’s valuation remains elevated despite the prospect of a softer quarter. The stock currently trades at a forward 12-month Price-to-Sales of 3.2X, versus the industry average of 2.23X. This wide premium appears difficult to justify given margin pressures and slowing operating leverage, indicating that the current valuation may already overstate near-term growth potential. The Value Score of D further reinforces this view, suggesting stretched multiples and limited scope for re-rating until earnings visibility improves. With such premium valuations, investors should consider reducing exposure before potential volatility surrounding the upcoming quarterly results.
MELI Trades at a Premium
Image Source: Zacks Investment Research
Conclusion
MercadoLibre’s third-quarter results are expected to reveal resilient revenue growth but persistent pressure on margins amid higher fulfilment costs, FX volatility and competitive intensity. With operating leverage yet to recover and valuation still elevated, the near-term outlook remains cautious. The stock’s premium valuation further limits upside potential, indicating that near-term growth optimism is already priced in amid moderating earnings momentum. MercadoLibre currently has a Zacks Rank #4 (Sell), which implies investors should stay away from the stock right now.
Image: Bigstock
MercadoLibre's Pre-Q3 Earnings Analysis: Hold or Fold the Stock?
Key Takeaways
MercadoLibre (MELI - Free Report) is slated to report third-quarter 2025 results on Oct. 29.
The Zacks Consensus Estimate for third-quarter revenues is pegged at $7.25 billion, suggesting year-over-year growth of 36.55%. The consensus mark for earnings is pegged at $9.43 per share. The estimate indicates year-over-year growth of 20.43%.
MELI Earnings Surprise History
MELI’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, the average surprise being 14%.
MercadoLibre, Inc. Price and EPS Surprise
MercadoLibre, Inc. price-eps-surprise | MercadoLibre, Inc. Quote
Earnings Whispers for MELI
According to the Zacks model, the combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here.
MELI has an Earnings ESP of -0.21% and a Zacks Rank #4 (Sell) at present.
Top-Line Growth Estimates for Q3
The Zacks Consensus Estimate for third-quarter 2025 Argentina revenues is pegged at $1.56 billion, suggesting an increase of 51.4% from the figure reported in the year-ago quarter.
The consensus mark for Brazil revenues is pinned at $3.92 billion, indicating an increase of 34.5% from the figure reported in the year-ago quarter.
The consensus mark for Mexico revenues is pinned at $1.67 billion, indicating a 45.7% increase from the figure reported in the year-ago quarter.
The Zacks Consensus Estimate for revenues from other countries is pegged at $293.12 million, suggesting a 32.6% increase from the figure reported in the year-ago quarter.
Factors Shaping Upcoming Results of MELI
MercadoLibre is expected to have entered the third quarter of 2025 with concerning momentum despite delivering 34% year-over-year revenue growth in the prior quarter, as the operating margin contraction of 210 basis points implied rising profitability strain. The June expansion of Brazil’s free shipping program — cutting the minimum threshold from BRL79 to BRL19 — is likely to have continued eroding margins through the quarter to be reported, driven by higher fulfilment and subsidy costs. Elevated marketing expenses are expected to have persisted as the company defended its share against intensifying competition from Amazon ((AMZN - Free Report) ), Sea Limited ((SE - Free Report) ) and Nubank ((NU - Free Report) ).
Competitive dynamics across Latin America are expected to have remained intense, shaping a more challenging backdrop for MELI. In Brazil, Amazon’s continued logistics buildout likely enhanced delivery speed and product breadth, narrowing MELI’s advantage in convenience and assortment. Sea Limited’s Shopee platform is expected to have sustained strong traction through aggressive discounting and interactive shopping tools, likely diverting lower-ticket purchases and weighing on take rates and order values. Meanwhile, Nubank’s expanding financial ecosystem across credit cards, payments and investments is expected to have intensified pressure on Mercado, limiting engagement and share gains in Brazil and Mexico.
Political and macroeconomic conditions are expected to have further complicated MELI’s performance. In Argentina, corruption allegations involving President Milei’s administration likely heightened uncertainty and weakened consumer sentiment, while depreciation of the peso and real is expected to have pressured reported revenue and inflated FX losses. Higher local interest rates likely curbed credit expansion, and the persistently elevated 18% non-performing loan ratio over 90 days is expected to have sustained asset quality concerns.
Despite all these pressures expected to weigh on the quarter under review, MercadoLibre’s continuous efforts to deepen customer engagement through enhanced logistics, targeted marketing and product diversification are expected to have supported revenue momentum. Even though rising credit risk remains a concern, the company’s strong advertising traction, growing base of fintech users, and sustained strength in Brazil and Mexico likely contributed positively to top-line growth. MELI’s third-quarter performance is expected to reflect steady operational momentum across commerce and fintech, though overall efficiency and margins are likely to have remained constrained. Persistent macro volatility, tighter financial conditions, and heightened regional competition are expected to have limited the extent of profitability recovery despite sustained revenue growth.
MELI Price Performance & Stock Valuation
MercadoLibre’s shares have advanced 27.1% year to date, outpacing the Retail-Wholesale sector’s 7.1% increase and the S&P 500’s 16.6% rise. In comparison, Amazon has added 2.2%, while Sea Limited and Nubank have delivered stronger returns of 45.8% and 52.9%, respectively. The performance, though strong, trails key regional peers, suggesting that persistent margin pressures and intensifying regional competition may have limited the stock’s relative momentum.
MELI’s YTD Price Performance
Image Source: Zacks Investment Research
Compared to the broader Zacks Internet–Commerce industry, MELI’s valuation remains elevated despite the prospect of a softer quarter. The stock currently trades at a forward 12-month Price-to-Sales of 3.2X, versus the industry average of 2.23X. This wide premium appears difficult to justify given margin pressures and slowing operating leverage, indicating that the current valuation may already overstate near-term growth potential. The Value Score of D further reinforces this view, suggesting stretched multiples and limited scope for re-rating until earnings visibility improves. With such premium valuations, investors should consider reducing exposure before potential volatility surrounding the upcoming quarterly results.
MELI Trades at a Premium
Image Source: Zacks Investment Research
Conclusion
MercadoLibre’s third-quarter results are expected to reveal resilient revenue growth but persistent pressure on margins amid higher fulfilment costs, FX volatility and competitive intensity. With operating leverage yet to recover and valuation still elevated, the near-term outlook remains cautious. The stock’s premium valuation further limits upside potential, indicating that near-term growth optimism is already priced in amid moderating earnings momentum. MercadoLibre currently has a Zacks Rank #4 (Sell), which implies investors should stay away from the stock right now.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.