Should I Buy Mercado Libre (MELI)? — Finance YouTuber Analysis

The YouTuber continues to buy MercadoLibre (MELI), asserting it's one of the cheapest stocks in the market. He points to its dominant e-commerce market share in Mexico and Latin America with significant growth, accelerating high-margin advertising revenue (73% YoY growth, 80% operating margin), and a massive fintech platform comparable in size to Nubank. He argues a sum-of-the-parts valuation suggests the current $82 billion market cap is significantly undervalued, especially considering its long growth runway and analyst expectations for revenue to more than double in three years.

“I truly think that Marcato Libre is one of the cheapest stocks in the entire market right now. And I don't necessarily agree with the reasons why the market is trading it so low.” — ▶ 17:00

The YouTuber identifies MercadoLibre as a potential buying opportunity, believing it to be one of many stocks with strong fundamentals that have been 'left behind' by the market's focus on AI and semiconductors. He suggests that despite the S&P 500 being at all-time highs, there is significant value in such overlooked companies.

“Just take a look at Skyward. Take a look at BAM. Take a look at Mastercard Visa Microsoft even Nvidia. Arguably, Marcato, Libre, New Bank, Meta, Brookfield Corporation, KKR, Apollo.” — ▶ 40:40

The YouTuber views MercadoLibre as significantly undervalued after a post-earnings drop, despite its dominant e-commerce and fintech positions in Latin America and explosive growth in its advertising business. While short-term margin compression due to aggressive investment is a market concern, the YouTuber believes the long-term growth and potential for margin expansion make it a 'ridiculously cheap' stock.

“So over the longer term, if Marcato Libre can continue to see such strong revenue growth, maintain their marketleading positions across Latin America, expand their advertising business, and just continue growing overall, then eventually when they do expand their margins, the profits this business will see will be explosive.” — ▶ Watch clip

The YouTuber believes MercadoLibre is significantly undervalued, trading at approximately 12 times its underlying free cash flow potential if it were to cease aggressive growth investments. He argues that current margin compression is a strategic choice to capture long-term market share and that the company's investments are clearly paying off, leading to accelerating revenue growth and a strengthening competitive moat. He emphasizes that this is a long-term investment with decades of growth ahead, not suitable for short-term traders.

“I believe that Marcato Libre stock is very undervalued in the market today. If their investments can pay off and if long-term that free cash flow can be realized. That's really the investment thesis.” — ▶ 30:00

The YouTuber is highly bullish on Mercado Libre, citing its consistent high revenue growth (49% in Q1 2026) and the vast untapped market in Latin America. They believe the company's current investment cycle, which temporarily compresses margins, is a strategic move to unlock significant long-term growth by expanding its customer base and ecosystem, similar to Amazon's early playbook. The executive interviewed suggests the company could become a trillion-dollar entity, implying a 10x growth from its current valuation, and highlights the market's underappreciation of its long-term growth potential.

“I think that if you factor factor that in even with reduced margins the opportunity is immense and it's a screaming buy.” — ▶ 40:00

The YouTuber is bullish on MercadoLibre, noting 49% revenue growth driven by both e-commerce and fintech segments. He argues that the company is making strategic investments in logistics and credit, which are causing short-term margin pressure but are crucial for long-term moat expansion. A reverse discounted cash flow analysis indicates the stock is significantly undervalued, as it only requires 4% annual revenue growth to justify its current price, far below its historical and projected growth rates.

“Clearly there's a disconnect there. So I think this as well is very much a stock that is worth owning.” — ▶ Watch clip

While acknowledging Mercado Libre's strong financials and management, the YouTuber avoids the stock due to his lack of understanding of the South American market dynamics, including political and regulatory environments. He emphasizes the importance of understanding the market a company operates in, and feels he cannot adequately assess the risks associated with MELI's primary operating regions.

“The problem is is I don't understand the market that they're in at all. This is not the American market. This is the South American market.” — ▶ 10:30