New York, Feb 27, 2026, 15:57 EST — Regular session
- After two rough sessions of heavy selling, MELI shares managed to climb late Friday.
- Management cited margin pressure from investments, calling out shipping and credit in particular.
- Wall Street trimmed price targets. Coming up: a conference appearance on March 24, then results on May 7.
MercadoLibre clawed back 0.8% to $1,755.16 late Friday, making up a slice of its sharp post-earnings drop. Despite the bounce, shares remained around 9% lower than Tuesday’s close, after plunging 8% Wednesday and sliding another 1.5% Thursday. On Friday, the stock traded between $1,721 and $1,776. 1
Why does it matter? The conversation has narrowed to a single point: how much patience investors have for shrinking margins in exchange for growth. MercadoLibre trades as if scaling up will inevitably boost operating leverage—an idea that’s facing some real scrutiny right now.
Mercado Pago keeps the company balancing between commerce and payments, but it’s pushing further into lending and logistics lately. This blend tends to deliver in favorable markets. Trouble is, higher costs or shakier credit can turn it into a liability fast.
MercadoLibre told shareholders in an SEC filing this week that net revenue and financial income jumped 45% year-on-year for the fourth quarter, landing just under $8.8 billion. Net income, though, fell 13% to $559 million. Operating income came in at $889 million. The company pointed to its push on several fronts — among them, lowering the free-shipping minimum in Brazil, growing cross-border trade, and ramping up first-party sales — as factors that sliced operating margin by roughly 5 to 6 percentage points. The letter also locked in a CEO transition effective Jan. 1: Ariel Szarfsztejn now holds the top job, with founder Marcos Galperin stepping into the executive chairman role. Gross merchandise volume for the quarter reached $19.9 billion, while total payment volume hit $83.7 billion. 2
CFO Martin de los Santos told analysts the margin squeeze was intentional, describing it as a trade-off: the company isn’t focused on maximizing short-term margin while it pushes investments. CEO Ariel Szarfsztejn pointed to “record conversion rates” and “record retention rates” in Brazil after the latest reduction to the free-shipping threshold. Over at Mercado Pago, chief Osvaldo Giménez noted the credit-card book’s non-performing loan ratio fell to a record low—just 4.4%. 3
Price targets dropped fast. On Feb. 25, Trevor Young at Barclays lowered his target to $2,600 from $2,900. Data from StockAnalysis shows Deepak Mathivanan at Cantor Fitzgerald and Scott Devitt at Wedbush both cut theirs to $2,400. All three analysts stuck with buy-equivalent ratings. 4
MercadoLibre posted earnings of $11.03 per share, falling short of estimates, Investors.com reported. Revenue did come in ahead of projections, but competition in Brazil remains a drag. Wedbush analyst Devitt cut his price target in the same note, flagging near-term earnings pressure driven by continued investment. 5
The flip side remains straightforward. Should early delinquencies tick up alongside portfolio growth, or if shipping costs fail to recover quickly, questions over margins could persist. Any weakness among consumers in Brazil or Mexico would only complicate things further.
Traders find themselves fixated once again on shipping costs, marketing budgets and how credit quality is holding up. The stock did manage a bounce late in the week—still, that wasn’t enough to wipe out the earlier losses.
MercadoLibre is slated to present at the Morgan Stanley Technology, Media & Telecom Conference in New York on March 24. First-quarter results are penciled in for May 7. 6
