Prediction: Buying MercadoLibre Today Could Set You Up for Life
Key Takeaways
It's been a roller coaster of a year so far for the stock market. After starting off strong and then plunging with the announcement of new tariffs, it's swinging back...
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investment
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July 8, 2025
03:33 AM
The Motley Fool
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It's been a roller coaster of a year so far for the stock market
After starting off strong and then plunging with the announcement of new tariffs, it's swinging back up nearly 7% year to date
In the short term, in the stock market could be volatile
If you'd invested $1,000 in the S&P 500 at the start of the year, it would have gone as low as $860 in April, but today it would be worth $1,075
In the long term, in the stock market could lead to fabulous wealth
Having a diversified portfolio is an essential part of building wealth over time, and filling it with excellent stocks could help you beat the market
Although you shouldn't rely on just one stock, even a single stock in your portfolio that outperforms could set you up for life
MercadoLibre (MELI -0. 59%) is one stock that has that potential
Image source: Getty Images
Leading in nology MercadoLibre's core is e-commerce
It runs a platform similar to Amazon, serving 18 Latin American countries, and it's growing at a rapid pace
Revenue increased 64% (currency neutral) year over year in the 2025 first quarter, with gross merchandise volume (GMV) up 40%
It performed particularly well in Argentina, one of its main, which has been experiencing high economic volatility
Total items sold increased 28% year over year, but 52% in Argentina, where GMV was up 126%
MercadoLibre has been making imvements to its platform and logistics network to become an even more attractive option for shoppers, especially in grocery
It made user experience upgrades in, ad placements, and a repeat purchase feature, and grocery sales increased 65% over last year in the quarter
It's important to note that while MercadoLibre is actually almost as old as Amazon, the region it serves is way behind the U
In e-commerce penetration
Management says it lags by a decade, with only 14% penetration, in contrast with 29% in the U
That's how it's still able to report such incredible growth
As it reaches more people and offers greater value, it's drawing greater interest and bringing more customers online
It has a long way to go to even reach other global penetration levels, which are still low and growing as a percentage of total retail sales
Beyond e-commerce, MercadoLibre has developed a robust fin segment that grew out of its underbanked population's need to pay for ducts
These days, the company offers a competitive suite of services that include digital payments, credit cards, tools, and more, and it's also growing quickly
In the first quarter, total payment volume increased 72% from last year, and monthly active users were up 30%
The credit portfolio was up 75%, and assets under management more than doubled
The opportunity here is huge, too
Only 28% of the population in its region has a credit card, versus 67% in the U. , and 74% have bank accounts, versus 95% in the U
How MercadoLibre stock can set you up for life We've established that MercadoLibre is growing at a fast rate and has a massive opportunity
How will that translate into stock gains
As a fun and constructive exercise, consider that toward the end of 2009, Amazon had a revenue similar to MercadoLibre's current trailing 12-month revenue
It's grown 2,900% since then, and its stock has increased nearly 4,700%
If MercadoLibre can a similar trajectory, its stock could create similar holder wealth
Incidentally, as shown in the chart below, MercadoLibre has grown and gained much more over the same period to reach its current levels
If you had invested $10,000 in Amazon stock in 2009, you'd have nearly $500,000 today, 16 years later
If you invest a similar amount in MercadoLibre today and hold it for the next two or even three decades, there's a chance you could have a lot more
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors
Jennifer Saibil has positions in MercadoLibre
The Motley Fool has positions in and recommends Amazon and MercadoLibre
The Motley Fool has a disclosure policy.
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