A month has gone by since the last earnings report for MercadoLibre (MELI Quick QuoteMELI - Free Report) . Shares have lost about 7.3% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is MercadoLibre due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for MercadoLibre, Inc. before we dive into how investors and analysts have reacted as of late.

MercadoLibre’s Q4 Earnings Miss Estimates, Revenues Rise Y/Y

MercadoLibre reported fourth-quarter 2025 earnings of $11.03 per share, which missed the Zacks Consensus Estimate by 6.29% and declined 12.53% year over year. Revenues rose 44.55% on a year-over-year basis (47% on an FX-neutral basis) to $8.76 billion. The top line surpassed the Zacks Consensus Estimate by 2.86%.

Total revenues were driven by continued strength across commerce and fintech segments, which grew 40% and 51% year over year to $4.98 billion and $3.78 billion, respectively. In the commerce segment, Brazil and Mexico each delivered foreign exchange-neutral GMV growth of 35% year over year, while Argentina posted foreign exchange-neutral GMV growth of 42% year over year. 

Items sold grew 43.1% year over year to 751.8 million. Unique buyer growth was 23.6% year over year, with the number reaching 83.2 million.

Fintech Monthly Active Users rose 27.3% year over year to 77.9 million. Engagement with Mercado Pago continued to strengthen, with Assets Under Management growing 78% year over year to $18.81 billion. The credit portfolio expanded 90% year over year to $12.5 billion.

Revenues from MELI's advertising services rose 70% year over year on a reported basis and 67% on a foreign exchange-neutral basis.

MELI’s Q4 in Detail

Brazil: Net revenues in the fourth quarter reached $4.64 billion (52.9% of total revenues), up 47.9% year over year. 

Mexico: The market generated revenues of $2.10 billion (23.9% of total revenues), which increased 55.6% year over year. 

Argentina: Net revenues in the reported quarter were $1.61 billion (18.4% of total revenues), reflecting an increase of 23.3% year over year. 

Other countries: The markets generated revenues of $414 million (4.7% of total revenues), representing growth of 53.9% on a year-over-year basis.

Key Metrics for MELI

Gross Merchandise Volume of $19.9 billion increased 37% year over year and 36.5% on a foreign exchange-neutral basis. 

The number of successful items sold was 751.8 million, up 43.1% year over year. 

Total Payment Volume rose 42.1% year over year and 52.6% on a foreign exchange-neutral basis to $83.7 billion. Acquiring Total Payment Volume grew 33% year over year to $55.7 billion.

Total payment transactions increased 35.5% year over year to 4.51 billion. 

The credit portfolio reached $12.5 billion, growing 90% year over year. The portfolio composition consisted of 36% consumer lending, 45% credit card, 16% merchant lending and 2% asset-backed financing.

MercadoLibre’s Operating Details

In the fourth quarter, the gross margin contracted 220 basis points on a year-over-year basis to 43.2%.

Total operating expenses were approximately $2.9 billion, which increased 50.1% year over year. 

The operating margin contracted 340 basis points from the year-ago period to 10.1%. It is worth noting that income from operations of $889 million includes $99 million of one-off tax credits in Brazil booked mostly within cost of net revenues; excluding these credits, the operating margin was approximately 9%. 

Net Interest Margin After Losses improved sequentially to 23.3%, up from 21% in the third quarter of 2025, driven by higher spreads in consumer and merchant loan portfolios. The 15-90 day non-performing loan ratio edged up to 7.6% from 6.8% in the prior quarter.

Balance Sheet of MELI

As of Dec. 31, 2025, cash and cash equivalents were $3.67 billion, up from $3.01 billion as of Sept. 30, 2025. 

Short-term investments were $2.63 billion as of Dec. 31, 2025, compared to $3.72 billion as of Sept. 30, 2025. Net debt increased to $4.68 billion at the end of the quarter compared to $4.61 billion as of Sept. 30, 2025, reflecting continued funding for Mercado Pago operations and credit portfolio expansion.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a downward trend in estimates review.

The consensus estimate has shifted -23.08% due to these changes.

VGM Scores

At this time, MercadoLibre has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock has a score of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, MercadoLibre has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

MercadoLibre belongs to the Zacks Internet - Commerce industry. Another stock from the same industry, Booking Holdings (BKNG Quick QuoteBKNG - Free Report) , has gained 1.8% over the past month. More than a month has passed since the company reported results for the quarter ended December 2025.

Booking Holdings reported revenues of $6.35 billion in the last reported quarter, representing a year-over-year change of +16%. EPS of $48.80 for the same period compares with $41.55 a year ago.

Booking Holdings is expected to post earnings of $29.50 per share for the current quarter, representing a year-over-year change of +18.9%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Booking Holdings. Also, the stock has a VGM Score of D.