New York, Feb 27, 2026, 15:57 EST — Regular session
- MELI shares rose late Friday after two sessions of heavy selling.
- Management pointed to investment-driven margin pressure, especially in shipping and credit.
- Wall Street cut price targets; the next catalysts include a March 24 conference appearance and May 7 results.
MercadoLibre shares rose 0.8% to $1,755.16 in late afternoon trade on Friday, trimming a steep post-earnings slide. The stock was still down about 9% from Tuesday’s close after falling 8% on Wednesday and another 1.5% on Thursday, with Friday’s trading range between $1,721 and $1,776. 1
The move matters now because the debate has tightened into one question: how long investors will tolerate margin pressure for growth. MercadoLibre is still priced like a company that can turn scale into operating leverage, and that assumption is getting tested.
The company straddles commerce and payments through Mercado Pago, and it is leaning harder into logistics and lending. That mix can work well in good times. It can also bite when costs rise or credit quality softens.
In a shareholder letter filed with the SEC this week, MercadoLibre said net revenue and financial income grew 45% year-on-year in the fourth quarter to nearly $8.8 billion, while net income slipped 13% to $559 million. Operating income was $889 million and it said strategic investments — including a lower free-shipping threshold in Brazil, cross-border trade and first-party sales (where it sells directly) — cut operating margin by about 5 to 6 percentage points; it also confirmed a CEO handover on Jan. 1, with Ariel Szarfsztejn taking over and founder Marcos Galperin becoming executive chairman. It reported gross merchandise volume (GMV, the value of goods sold on the platform) of $19.9 billion and total payment volume (TPV, payments processed) of $83.7 billion for the quarter. 2
On the earnings call, CFO Martin de los Santos said the margin squeeze was a deliberate trade-off and that the company was “not trying to optimize short-term margin” while it invests. CEO Ariel Szarfsztejn said Brazil’s latest free-shipping-threshold cut delivered “record conversion rates” and “record retention rates,” while Mercado Pago chief Osvaldo Giménez said the credit-card book’s non-performing loan ratio — loans not being paid on time — hit an all-time low of 4.4%. 3
Price targets came down quickly. Trevor Young at Barclays cut his target to $2,600 from $2,900 on Feb. 25, while Deepak Mathivanan at Cantor Fitzgerald and Scott Devitt at Wedbush both moved to $2,400, StockAnalysis data showed; all kept buy-equivalent ratings. 4
Investors.com said MercadoLibre’s $11.03 earnings per share missed expectations even as revenue topped forecasts, and pointed to heightened competition in Brazil as another overhang. Wedbush’s Devitt lowered his target in that note, citing short-term earnings pressure from ongoing investment. 5
But the downside case is still simple: if early delinquencies rise as the loan book grows, or if shipping economics don’t improve fast enough, the margin debate drags on. A softer consumer backdrop in Brazil or Mexico would make that harder.
For now, traders are back to watching the same items: shipping costs, marketing spend and credit quality. The stock’s late-week bounce helps, but it does not erase the drawdown.
Next up, MercadoLibre is scheduled to appear at the Morgan Stanley Technology, Media & Telecom Conference in New York on March 24, before a provisional first-quarter results date of May 7. 6
