Why MercadoLibre Is My Top Pick Even as Growth Cools

MercadoLibre remains a compelling investment despite a measurable slowdown in revenue growth. The company’s dominant e-commerce marketplace and rapidly expanding fintech arm give it a diversified revenue base and structural advantages across Latin America — a region where online penetration and digital payments are still in early innings.

Growth is decelerating from the exceptional levels seen during the pandemic, driven by a normalization of discretionary spending and tougher macro conditions. That said, the mix shift toward higher-margin fintech services, including payments, credit and wallet solutions, is improving unit economics. MercadoPago and associated financial products capture a larger share of customer spending and offer recurring, fee-based revenue that can partly offset slower marketplace GMV expansion.

Operational improvements also support a positive view. Ongoing investment in logistics (Mercado Envios), automation, and localized fulfillment is raising conversion and reducing delivery friction — a competitive moat that becomes harder for smaller players to replicate. Management’s focus on balancing growth and profitability has translated into better gross margins and a clearer path to sustainable free cash flow as scale efficiencies materialize.

Valuation remains an essential consideration. While the stock reflects many of the company’s long-term advantages, current multiples do not fully price in the optionality from payments monetization, cross-sell of financial services, and advertising revenue growth on the marketplace. For investors with a multi-year horizon, these levers can support above-market returns if execution stays on track and macro volatility stabilizes.

Risks are tangible. Exposure to currency swings, uneven country-level growth across Latin America, regulatory scrutiny of fintech activities, and competition from global and local players could pressure results. Investors should weigh these factors and consider position sizing consistent with their risk tolerance.

In summary, MercadoLibre’s transition from pure marketplace growth to a two-pronged model that combines ecommerce dominance with accelerating fintech monetization makes it my top pick today. The combination of durable market share, improving margins, and multiple growth avenues suggests attractive long-term upside even as near-term growth rates moderate.