AgenticFinanceChileMELI MercadoLibre, Inc.
3-Statement Model
Integrated income statement, balance sheet, and cash flow projections with 3Y historical + 5Y forecast.
FY2025 Revenue
28,900
FY2025 Net Income
0.0%
Revenue CAGR
40.0%
Projection Years
8
MELI — Model Update | Post Q1 2026
MercadoLibre, Inc. (NASDAQ: MELI) | 2026-05-26
Rating: MAINTAIN BUY | Target: $2,200 | Prior: $2,350 (-6.4%) | Upside: +32.2% ($1,664) |
Update Trigger & Summary
MELI reported Q1 2026 on 2026-05-07: top-line BEAT but bottom-line MISS. Revenue $8.85B (+49% YoY, strongest since Q2 2022) vs. consensus ~$8.40B (+5.4% beat); EPS $8.23 vs. consensus $9.92–10.32 (-17% miss). Operating margin collapsed to 6.9% (-600bp YoY) — COGS +300bp (logistics investments), bad debt +390bp (credit portfolio +87% to $14.6B), SG&A +100bp. Stock fell from $1,856 (Apr 17) to $1,664 (May 26, -10%). We raise FY26E revenue +2.5% ($37.6B→$38.5B) on growth acceleration, but cut FY26E EBITDA -25% ($5.9B→$4.4B) and EPS -22% ($53→$41.50) as the investment cycle absorbs margin through 2026. FY27E sees partial recovery but lower than prior trajectory (EBITDA -13%, EPS -15%). New TP $2,200 (-6.4%) — MAINTAIN BUY; conviction 4.3→4.0 as margin normalization timeline pushes from H2 2026 to H2 2027. Pillar 5 (Margin Expansion) cut from Monitor to At Risk; Pillars 1-3 (E-comm, Fintech, Logistics) upgraded to Beating on KPI strength.
Q1 2026 Actuals vs. Prior Estimates
Line Item | Q1 2025A | Q1 2026A | YoY | Q1 2026E | Surprise | Notes |
Revenue ($M) | 5,940 | 8,850 | +49.0% | ~8,400 | +5.4% | Strongest growth since Q2 2022 |
Commerce Revenue ($M) | — | 4,900 | +46% | — | — | GMV $19.0B (+42%), items +47% |
Fintech Revenue ($M) | — | 3,950 | +54% FXN | — | — | TPV $87.2B (+50%), credit +87% |
Gross Margin | ~46% | ~43% | -300 bp | ~45.5% | -250 bp | Logistics + credit cost-of-revenue |
Operating Margin | 12.9% | 6.9% | -600 bp | 11.5% | -460 bp | Investment cycle compresses margin |
Operating Income ($M) | ~767 | 611 | -20.3% | ~966 | -36.7% | First operating income decline since IPO |
Net Income ($M) | ~493 | 417 | -15.4% | ~605 | -31.1% | Net margin 4.7% (-360bp) |
EPS ($) | 9.74 | 8.23 | -15.5% | $11.85 | -30.5% | Miss vs $9.92–10.32 sell-side range |
Capex ($M) | — | 271 | — | — | — | Brazil/Argentina logistics buildout |
Segment & KPI Performance — Growth Accelerating, Margins Compressing
Metric | Q1 2026A | YoY | vs. Initiation/Prior Read |
GMV | $19.0B | +42% | BEATING — best growth in 3+ years; Brazil items +56% |
Items Sold | 721.7M | +47% | BEATING — broad demand strength |
Unique Active Buyers | 84.1M | +26% | BEATING — Brazil +17M YoY, record adds |
TPV (Mercado Pago) | $87.2B | +50% (+55% FXN) | BEATING — sustained fintech adoption |
Credit Portfolio | $14.6B | +87% | AT RISK — bad debt +390bp; vintage risk building |
Fintech MAUs | 82.9M | +29% | BEATING — cross-sell engine accelerating |
AUM (Mercado Pago) | $19.9B | +77% | BEATING — deposits become funding base |
Same/Next-Day Shipments | 199M | +39% | BEATING — cost/shipment -17% |
Brazil GMV | — | +38% | STRONG — items sold +56%, share gains |
Mexico GMV | — | +28% | ON TRACK — slower than other markets |
Argentina GMV | — | +41% | STRONG — local currency recovery |
Operating Margin Bridge: 12.9% → 6.9% (-600 bp)
Driver | Impact (bp) | % of Decline | Commentary |
Q1 2025 Operating Margin | +1,290 | — | Baseline |
COGS — Logistics buildout | -300 | 50% | Brazil $10.9B / Argentina $3.4B capex programs |
Bad Debt — Credit expansion | -390 | 65% | Portfolio +87%; cohort provisioning + expanded duration |
SG&A — Tech / personnel | -100 | 17% | LLM Search rollout, salesforce expansion |
Other (offsetting) | +190 | (32%) | Pricing, fintech scale, freight savings |
Q1 2026 Operating Margin | +690 | — | Reported 6.9% |
Forward Estimate Revisions
Metric | Old FY26E | New FY26E | Δ FY26E | Old FY27E | New FY27E | Δ FY27E |
Revenue ($M) | 37,570 | 38,500 | +2.5% | 46,963 | 48,500 | +3.3% |
Revenue growth | +30.0% | +33.2% | +320 bp | +25.0% | +26.0% | +100 bp |
Gross profit ($M) | 17,094 | 16,720 | -2.2% | 21,838 | 22,000 | +0.7% |
Gross margin | 45.5% | 43.4% | -210 bp | 46.5% | 45.4% | -110 bp |
EBITDA ($M) | 5,936 | 4,428 | -25.4% | 8,078 | 7,032 | -13.0% |
EBITDA margin | 15.8% | 11.5% | -430 bp | 17.2% | 14.5% | -270 bp |
Operating income ($M) | 4,695 | 3,272 | -30.3% | 6,762 | 5,577 | -17.5% |
Operating margin | 12.5% | 8.5% | -400 bp | 14.4% | 11.5% | -290 bp |
Net income ($M) | 2,703 | 2,117 | -21.7% | 3,774 | 3,201 | -15.2% |
EPS ($) | 53.00 | 41.50 | -21.7% | 74.00 | 62.80 | -15.1% |
Key Assumption Changes
- Revenue growth FY26E: 30.0% → 33.2% — Q1 +49% acceleration; items sold +47%, TPV +50% indicate growth durability. Raising base year growth.
- Gross margin FY26E: 45.5% → 43.4% — Q1 implied ~43%; logistics + credit cost-of-revenue elevated through FY26 as Brazil/Argentina capex programs continue.
- Bad debt FY26E: ~3.5% of revenue → 5.5% — Credit portfolio +87% creates large unseasoned cohort; reverts to ~4% in FY27 as portfolio matures.
- Operating margin FY26E: 12.5% → 8.5% — Management explicit ('now is the right moment to invest boldly'); margin recovery delayed to H2 2027 (was H2 2026).
- Operating margin FY27E: 14.4% → 11.5% — Partial recovery as credit cohorts season and logistics utilization ramps; full normalization (15%+) now FY28E.
- Capex FY26E: ~$1.5B → ~$1.7B — Reflects $271M Q1 actual run-rate + announced Brazil $10.9B / Argentina $3.4B multi-year programs.
- Credit portfolio FY26E: $18B → $22B — On pace at +87% YoY; mgmt actively expanding average duration (5→8mo).
- Mercado Ads / fintech high-margin mix not modeled to offset cost pressure until FY27 — Q1 ad commentary positive (LLM Search +100bp conversion) but not enough to offset.
- DCF terminal EBITDA margin: 20% (unchanged) — Long-term thesis intact; investment cycle delays not derails margin path.
- WACC: 11.5% (unchanged); terminal growth: 3.5% (unchanged); exit EV/EBITDA: 18x → 17x (modest derating on execution risk).
- Share count FY26E: 51.0M (unchanged); no buyback signaled.
- Conviction: 4.3 → 4.0 — Margin trajectory cut + credit cohort risk; offset partially by re-rating opportunity at $1,664.
Valuation Impact
Method | Weight | Prior FV | Updated FV | Change | Notes |
DCF (base case) | 50% | $2,250 | $2,150 | -4.4% | Lower FCF FY26-27, terminal unchanged |
EV/EBITDA (17x NTM) | 30% | $2,650 | $2,250 | -15.1% | NTM EBITDA $7.0B; multiple 18x→17x |
P/E (35x FY27E EPS) | 20% | $2,590 | $2,200 | -15.1% | FY27E EPS $74→$62.80; P/E 35x |
Blended TP | 100% | $2,350 | $2,200 | -6.4% | Weighted avg, rounded to nearest $50 |
DCF — Bear (5Y CAGR 20%, 14x exit) | — | $1,200 | $1,200 | 0% | Shopee gains, margin never recovers |
DCF — Bull (5Y CAGR 30%, 22x exit) | — | $3,000 | $2,900 | -3.3% | Margin recovers faster + Ads inflection |
Thesis Pillar Status — Post Q1
# | Pillar | KPI | Q1 Read | Status | Conviction |
1 | E-Commerce Leadership | GMV growth, items sold | GMV +42%, items +47% | BEATING | High |
2 | Mercado Pago Fintech Engine | TPV, MAUs, credit | TPV +50% FXN, MAUs +29% | BEATING | High |
3 | Logistics Moat (Envios) | Cost/shipment, same-day % | Cost -17%, 199M S/ND | BEATING | High |
4 | Advertising Revenue | Ad rev growth | LLM Search +100bp conv. | On Track | Medium-High |
5 | Margin Expansion Path | Operating margin | 6.9% (-600bp) | At Risk | Low (was Med) |
6 | Credit Quality (New) | Bad debt / portfolio growth | Bad debt +390bp; pf +87% | Monitor | Medium |
Bottom Line — What Changes & What Doesn't
WHAT CHANGES: (1) Margin trajectory: FY26E operating margin 12.5%→8.5%, FY27E 14.4%→11.5%; full normalization (15%+) pushed from FY26 to FY28E. (2) EPS cuts: FY26 -22%, FY27 -15%. (3) Credit cohort risk acknowledged: bad debt +390bp Q1; we add a 6th 'Credit Quality' pillar on Monitor watch. (4) TP cut $150 to $2,200 (-6.4%); conviction 4.3→4.0. WHAT DOESN'T: (1) Growth thesis is INTACT and arguably stronger — items sold +47%, TPV +50% FXN, GMV +42% are the best operating reads in three years. (2) Long-term margin target (20% EBITDA) unchanged; investment cycle delays, not derails. (3) DCF inputs (WACC 11.5%, TG 3.5%) unchanged. (4) Rating stays BUY — at $1,664, +32% upside is wide enough that a 6-12 month margin reset can be absorbed. ENTRY POINT: Re-rating already in price — stock -37% from $2,645 ATH (Jun 25) and -10% post-print. Tactical adds on weakness below $1,650; aggressive sizing only on Q2 evidence of margin stabilization.
Change Log
Date | Action | Previous | New | Notes |
2026-02-26 | Initiate coverage | N/A | BUY, TP $2,650 | Five-pillar bullish thesis |
2026-03-22 | Model update (market-driven) | BUY, TP 2,650 | BUY, TP 2,350 (-11.3%) | Multiple compression; conviction +0.1 |
2026-05-26 | Model update post Q1 26 | BUY, TP 2,350 | BUY, TP 2,200 (-6.4%) | Margin reset; conviction 4.3 → 4.0 |
Disclaimer: This is not investment advice. Analysis is for educational/illustrative purposes. Past performance is not indicative of future results. Always do your own research.
Datos Estructurados
Fuente: Yahoo Finance, SEC EDGAR, Damodaran, Company Filings