MercadoLibre Shares Sink. Is the Stock a Buy as Revenue Growth Remains Robust?

By Geoffrey Seiler – Feb 28, 2026 at 8:15AM ESTKey PointsThe Latin American e-commerce platform continues to see strong revenue growth.However, investments in free shipping and credit cards have compressed margins.The stock is attractively valued after its recent price dip and worth a closer look.Shares of MercadoLibre (MELI +0.96%) fell despite the company once again reporting robust revenue growth, as it felt some margin pressure.

The Latin American e-commerce company has seen its shares move lower over the past year, with the stock down around 20% over that time. Let's dig into the company's fourth-quarter results and prospects to see if now is a good time to buy the dip. ExpandNASDAQ: MELIMercadoLibreToday's Change(0.96%) $16.70Current Price$1757.58Key Data PointsMarket Cap$89BDay's Range$1721.41 - $1775.9852wk Range$1654.24 - $2645.22Volume793KAvg Vol567KGross Margin44.50% Revenue continues to soar For the fourth quarter, MercadoLibre's revenue soared 45%, or 47% in constant currencies, to $8.76 billion. That was easily ahead of the $8.49 billion consensus. However, its earnings per share (EPS) fell 13% to $11.03, missing the $11.44 consensus. This was largely due to operating margin compression, as the company invested in growth initiatives, including free shipping and credit cards. MercadoLibre is seeing strong growth in its fintech business, with monthly active users climbing about 30% for the 10th straight quarter. The company saw its credit card portfolio roughly double year over year to $12.5 billion, as it issued 3 million new cards just in the fourth quarter alone. Non-performing loans in its credit card portfolio, meanwhile, fell to an all-time low of 4.4%. At the same time, its assets under management soared 78% to $190 billion. Total payment volumes through Mercado Pago jumped 42%, or 52% in constant currencies, to $83.7 billion. Gross merchandise volume (GMV), which is the value of goods sold through its e-commerce platform, climbed 37% to $19.9 billion, while unique active buyers rose 24% to 83 million in the quarter. Its largest market, Brazil, saw a 35% currency-neutral jump in GMV, with a 26% increase in unique buyers. Mexico GMV also rose 35% on a currency-neutral basis, while Argentina GMV soared 42%. Ad revenue, meanwhile, surged 67%. The company credited the use to artificial intelligence (AI), which helped automate campaigns and improve its bidding algorithm. It also said AI was helping its sales force acquire high-value merchants more quickly. Management believes the company is well positioned for agentic commerce, saying it will drive more shopping online and also open up more ad opportunities. Image source: Getty Images. Is the stock a buy? The stocks of companies that are in investment mode are just not getting rewarded right now. However, MercadoLibre is growing its revenue quickly, and it generates strong free cash flow even with its capital expenditure investments. This is generally the recipe for long-term success in e-commerce. Meanwhile, its fintech business is proving to be a strong growth driver. With a forward price-to-earnings ratio (P/E) of 20.5 based on 2027 analyst estimates and a price/earnings-to-growth (PEG) ratio of below 0.5 (a PEG under 1 is typically considered undervalued), the stock is attractively valued. Given its growth and valuation, I'd be a buyer of the stock on this dip.Read NextFeb 28, 2026 •By Jennifer Saibil2 Stocks That Could Be Easy Wealth BuildersFeb 27, 2026 •By Matt Frankel, CFPDown 33%, Is MercadoLibre a Buy After Earnings?Feb 27, 2026 •By Josh Kohn-LindquistWhy MercadoLibre Stock Dipped This WeekFeb 25, 2026 •By Will HealySQUADRA Loads Up MercadoLibre With 89,000 Shares in New PositionFeb 25, 2026 •By Lawrence NgaHas Competition Permanently Changed MercadoLibre's Economics?Feb 24, 2026 •By Lawrence NgaIs Mercado Pago a Growth Engine or a Hidden Risk in 2026?About the AuthorGeoffrey Seiler is a contributing Motley Fool stock market analyst covering technology, consumer goods, healthcare, energy, and materials stocks. Prior to The Motley Fool, Geoffrey was a senior equity analyst at Raging Capital Management, a $600 million long-short hedge fund. He holds a bachelor’s degree in history from Haverford College.TMFFindProfitStocks MentionedMercadoLibreNASDAQ: MELI$1,758.49(+1.01%)+$17.61*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.