Latin America’s dominant e-commerce player, MercadoLibre, finds itself navigating turbulent waters. Despite continuing to deliver remarkable expansion metrics, institutional investors and market analysts are growing increasingly cautious about its trajectory. The central question emerges: Can the corporation maintain its regional supremacy against intensifying competitive pressures?
Financial Performance Highlights Growth-Profitability Gap
The company’s third-quarter results, disclosed on October 29, reveal a complex financial picture:
- Revenue expanded by 39.5 percent to reach $7.41 billion
- Earnings per share of $8.32 fell short of market projections
- Marked the 27th consecutive quarter exceeding 30 percent revenue growth
- Active buyer count increased to 76.8 million users
Mercado Pago, the company’s financial technology division, demonstrated particularly strong performance with revenue surging nearly 49 percent. However, the missed profitability targets raise concerns about whether aggressive market share acquisition is eroding profit margins.
Institutional Confidence Shows Cracks
Sentiment among major investors appears to be shifting significantly. Itau Unibanco, one of Latin America’s most prominent banking institutions, divested approximately 27 percent of its MercadoLibre holdings during the second quarter of 2025. This substantial reduction in position signals growing apprehension about the company’s future valuation potential and suggests institutional players are reconsidering their strategic allocations.
Should investors sell immediately? Or is it worth buying MercadoLibre?
Analyst Community Adjusts Projections
Leading investment firms have echoed these concerns through revised assessments. Citi reduced its price target from $2,700 to $2,500 while implementing a “90-day negative outlook” for the equity. The financial institution identified mounting competitive challenges across Latin America’s e-commerce and fintech sectors as the primary catalyst for this adjustment. Other firms including Benchmark and Cantor Fitzgerald similarly tempered their expectations during October.
Despite these downward revisions, the overall analyst sentiment remains cautiously positive. The consensus price target among 25 market experts stands at $2,854.71, indicating continued belief in substantial appreciation potential.
Balancing Expansion Against Earnings
MercadoLibre confronts the classic growth-company dilemma: as expansion accelerates, the cost of capturing additional market percentage points increases substantially. Chief Financial Officer Martin de los Santos has emphasized the company’s focus on maintaining equilibrium between growth and profitability, though recent financial metrics tell a more complex story.
The company’s management now faces a critical opportunity to reassure investors during the MS Asia Conference, where they can articulate their long-term strategic vision. The fundamental question remains whether impressive revenue expansion can sufficiently offset contracting margins and heightened competitive threats across its core markets.
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