What Happened?
Shares of latin American e-commerce and fintech company MercadoLibre (NASDAQ: MELI) fell 5.3% in the morning session after Jefferies analysts downgraded the stock from a Buy to a Hold rating. The analysts noted that "with the shares up over 50% year-to-date and following a strong relative performance in 2023, it downgrades the shares on valuation." Importantly, the downgrade does not indicate a negative shift in the company's fundamentals. Rather, the analysts viewed the recent run-up in MELI's stock price as an opportunity for investors to lock in some profits.
The shares closed the day at $2,478, down 3.8% from previous close.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy MercadoLibre? Access our full analysis report here, it’s free.
What The Market Is Telling Us
MercadoLibre’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 29 days ago when the stock gained 7.3% on the news that the company reported impressive first-quarter 2025 results, which significantly blew past analysts' revenue, EPS, and EBITDA expectations. The key highlight for the quarter was Argentina's staggering revenue growth of 184%, powered by triple-digit expansion in gross merchandise volume and a sharp rebound in consumer demand. As a result, sales climbed 37% from the previous year. Profits also improved meaningfully, aided by scale efficiencies and lower fulfillment costs per order in major markets like Brazil and Mexico. The EPS beat was a direct result of these gains, reflecting improved execution despite currency headwinds in Brazil and investment drag in Mexico. Overall, it was a strong quarter for MercadoLibre, driven by outsized growth in Argentina, resilient consumer demand, and encouraging momentum in fintech and advertising, despite mixed buyer metrics.
MercadoLibre is up 40.6% since the beginning of the year, and at $2,482 per share, it is trading close to its 52-week high of $2,606 from May 2025. Investors who bought $1,000 worth of MercadoLibre’s shares 5 years ago would now be looking at an investment worth $2,890.
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