QS Research · Michael Burry's Scion Capital analyst template · 2006
MERCADOLIBRE INC (MELI)
As of 2026-11-08 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction medium · base case -23% · downside -46% · upside +21%
At $1,510.00 on 2026-11-06 MELI trades at 20.9x EV/EBITDA TTM and 40.5x P/E TTM (N28, N31) on TTM EBITDA of $3.94B and net income of $1.89B (N15, N16). The market is not missing the growth — Q3 2026 revenue rose 45% to $10,750M and TPV rose 53% — it is paying a premium multiple while Q3 2026 operating income fell 6% to $676M at a 6.3% margin, so the burden is on the margin turn (S31, S5). Using section 13's EV/EBITDA cases on TTM EBITDA of $3.94B (N15): 16.5x = $65.0B EV, less $5.82B net debt (N24) = $59.2B equity, divided by 50.70M shares (N5) = $1,168 (-23%); 12x = $818 (-46%); 25x = $1,828 (+21%). That gives a negative base/downside skew but not the -30% base needed for a short, so the call is watch, not long or short; the dated Q3 2026 print (2026-11-04) is the catalyst for the multiple range, with Brazil shipping contribution positive but EPS missing at $8.83 vs $9.41 (S5, S11).
Key numbers
- Share price: $1,510.00
- Market cap: $76.55B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $38.52B
- EV / EBITDA (TTM): 20.9x
- P/E (TTM): 40.5x
- Price / book: 9.34x
The 15 boxes
- ✓ 1. Long-form business notes
MELI monetizes an e-commerce marketplace through commerce services (final value fees that include payment use, shipping, advertising, classifieds, subscriptions) plus first-party product sales under 10% of GMV, and monetizes fintech through payments, asset management, credit, cards, insurance and POS sales. From FY2020 to FY2025 revenue grew from $3.97B to $20.34B, operating income from $128.0M to $3.20B, and net income from -$1.0M to $2.00B. The business changed from a payments/money-market wallet plus merchant and consumer credit into a broader digital account with cards, insurance, savings/investments and crypto/stablecoin, with lending in four countries; Mercado Shops was discontinued at December 31, 2025. Operating cash flow ($12.12B FY2025) moves with the loan book and customer balances, so it is not owner earnings; earnings are the cleaner measure.
- ✓ 2. Competitive advantage
The sources support a scale-and-licence advantage rather than a brand or pricing-power story: revenue grew from $3.97B (FY2020) to $20.34B (FY2025) while operating income rose from $128.0M to $3.20B and net income from -$1.0M to $2.00B, so profit is compounding with size, not eroding. The moat that the filings actually describe is regulatory and physical: Mercado Pago holds e-money, acquirer, credit-card and credit licences in Brazil since 2018-2020 plus a DTVM operational in 2025 and an IFPE licence in Mexico since 2022, backed by a 123,670-person workforce (Dec 31, 2025) and $1.34B of FY2025 capex. The only competitor named anywhere in the sources is Amazon Mexico, and only in a Mexican antitrust file that was closed with no corrective measures. There is no market-share, segment-margin or competitor-financial data in these sources, so the durability case rests on margins and licensed rails, not on measured share.
- ✓ 3. 10-Q takeaways
Q3 2026 net revenues and financial income were $10,750 million, up 45% YoY and 41% FX-neutral, with GMV +38% and TPV +53%. Operating income was $676 million at a 6.3% margin, down 6% YoY, and net income $448 million at 4.2%; gross margin and cost ratio show shipping and product-cost pressure. The credit book reached almost $18 billion, +62% YoY, with NIMAL 20.1% and 15–90 day NPL 7.0%. Risk factors were unchanged from the 2025 10-K, and the 10-Q states no traditional earnings guidance.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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