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QS Research · Michael Burry's Scion Capital analyst template · 2006

MERCADOLIBRE INC (MELI)

As of 2026-11-02 · 12/15 boxes filled from SEC filings and market data

Conclusion: WATCH

Conviction low · base case -31% · downside -47% · upside +38%

At $1,694 (N1), MercadoLibre trades at 46.1x TTM net income (N28) and 23.3x EV/EBITDA (N26), above every profitable peer on P/E. Using the closest comparable Etsy's 16.4x EV/EBITDA (S1) on TTM EBITDA $3.89B (N14) gives EV $63.8B; subtracting net debt $4.9B ($10.63B debt N21 less $5.73B cash N20) yields only $58.9B equity, 31% below today's $85.88B market cap (N9). Downside to DLO's 12.9x (S1) is -47% and upside to ABNB's 31.7x is +38%, so the short case fails on upside risk while the long case fails on base/downside. The loan book makes FCF unreliable as owner earnings (N18), so earnings alone must carry the price. This is a watch: if Q3 shows margins inflecting and credit staying clean, the stock could re-rate, but current price embeds too much growth.

Key numbers

The 15 boxes

  1. ✓ 1. Long-form business notes

    MercadoLibre is Latin America’s leading e-commerce and fintech ecosystem, present in 18 e-commerce countries and 8 fintech countries as of FY2025. It generates commerce revenue from Marketplace fees, 1P product sales, logistics, advertising and classifieds, and fintech revenue from payments, credit, and financial services. Between FY2020 and FY2025, revenue grew from $3.97B to $20.34B and net income swung from -$1.0M to $2.00B, while the business expanded from basic payments and credits to credit cards, investments, crypto, loyalty, and streaming. Mercado Shops was discontinued and replaced by Mi Página inside the Marketplace.

  2. ✓ 2. Competitive advantage

    MercadoLibre's competitive advantage rests on its licensed fintech/payments infrastructure and its large, rapidly scaled workforce, which management describes as a cultural differentiator. Financial history from FY2020-FY2025 shows revenue, gross profit and operating income all multiplied, evidencing strong operating leverage. The only named competitor in the sources is Amazon Mexico, and a Mexican antitrust review in 2025 closed without corrective measures. Margins and returns are not explicitly given, but the raw figures imply expanding profitability.

  3. ✓ 3. 10-Q takeaways

    MELI's Q2 2026 revenue grew 49.8% YoY to $10,169 million, led by Brazil and fintech credit, while gross margin declined modestly to 46.1% from 45.6% on shipping and first-party costs. Management reiterated it does not provide traditional earnings guidance, and risk factors were unchanged from the 2025 10-K. The latest 10-Q also disclosed fintech regulatory updates in Brazil and Argentina but no material new risk factors.

  4. ✓ 4. Corporate governance
  5. ✓ 5. Overview of the prior 3 years of 8-K filings
  6. ✓ 6. Other significant filings
  7. ✓ 7. Chronology of significant news and events
  8. ✓ 8. Comparables valuation interpretation
  9. ✓ 9. Insider trading interpretation
  10. ○ 10. Earnings-call notes
  11. ○ 11. Impression of the shareholder letter
  12. ○ 12. Scuttlebutt overview
  13. ✓ 13. Valuation and risk/reward summary
  14. ✓ 14. Current price suppression and potential catalysts

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