- Should you Hold or Fold MercadoLibre Stock Post Q1 earnings?
May 13, 2026
MercadoLibre MELI shares have declined 15.6% following the release of its first-quarter 2026 results on May 7, 2026, as investors reacted negatively to another quarter of aggressive spending, margin compression and rising credit-related risks despite strong top-line growth. The selloff reflects growing concern that MELI is prioritizing scale expansion and ecosystem investments at a time when profitability visibility is weakening and free cash flow remains under pressure.
On a year-to-date basis, MELI has plunged 21.6%, underperforming the Zacks Electronic Commerce industry's return of 7.7% and the Zacks Retail and Wholesale sector's advance of 5.8%. Among Peers, Amazon AMZN has returned 15.2% year to date while Nu Holdings NU and Sea Limited SE have declined 20.7% and 24.7% respectively, suggesting regional macro conditions account for only part of MELI's relative weakness.
Let's delve deeper to determine what to do with the stock at current levels.
MELI’s Stock PerformanceZacks Investment Research
Image Source: Zacks Investment Research
MELI’s Revenue Momentum Masks Profitability Concerns
MELI delivered another quarter of strong revenue expansion, with net revenues and financial income increasing 49% year over year to $8.85 billion. Gross merchandise volume (GMV) increased 42% year over year, while total payment volume surged 50%. Mercado Pago’s monthly active users crossed 83 million, highlighting strong engagement trends across the ecosystem.
However, beneath the headline growth, profitability continues to weaken materially, driven by rising provisions, shipping subsidies and the upfront costs of scaling the credit card portfolio across three markets. Operating income declined 20% year over year to $611 million and operating margin compressed 600 basis points to 6.9%, while net income fell 16% to $417 million, producing an EPS of $8.23, missing the Zacks Consensus Estimate by 6.26% and declining 15.5% year over year.
The Zacks Consensus Estimate for second-quarter 2026 EPS is pegged at $9.94, revised down 17.4% over the past 30 days and implying a 3.59% year-over-year decline, suggesting the earnings pressure is not yet at its trough.
MercadoLibre, Inc. Price and ConsensusMercadoLibre, Inc. Price and Consensus
MercadoLibre, Inc. price-consensus-chart | MercadoLibre, Inc. Quote
MELI Deepens Investment Cycle
MELI is simultaneously deploying capital across free shipping, a rapidly scaling credit card portfolio, first-party inventory, cross-border trade and fulfillment infrastructure, each investment track carrying long payback horizons. The fulfillment network spans over 50 facilities and handled 55% of shipments in the first quarter, reflecting growing operational scale. Cross-border trade grew 68% year over year on a FX-neutral basis as friction was removed from the international drop-shipping model. These initiatives are accelerating engagement and transaction growth, but they are doing so at the expense of near-term margins and earnings visibility.
The credit card expansion adds a separate layer of pressure. Rapid scaling across three markets requires upfront provisioning and funding costs that delay profitability at the portfolio level. While older Brazilian cohorts are maturing as expected, the credit card book more than doubled to $6.6 billion, and issuance is accelerating in Mexico and Argentina, meaning the provisioning drag is widening before it narrows.
MELI’s marketplace momentum is dependent on promotional intensity to sustain itself. Lower seller take rates, broader free shipping incentives and continued first-party inventory investment are strengthening assortment and conversion, but each represents a recurring cost rather than a one-time investment. If consumer demand softens across Latin America, the economics of sustaining this level of promotional activity become considerably harder to defend.
Story Continues
Competition and Valuation Offers Little Comfort for MELI
The competitive backdrop is intensifying for MELI as Amazon continues raising the bar on logistics efficiency and marketplace standards in Brazil, a market where MELI is simultaneously absorbing rising fulfillment costs. Nu Holdings is deepening financial product penetration across the same core markets with a leaner model that is already translating investment into near-term earnings, whereas MELI's fintech margins continue to compress. Sea Limited, having completed its profitability reset, is now competing with the cost discipline that MELI has explicitly deprioritized, a dynamic that makes defending market share increasingly expensive.
MELI trades at a forward price to earnings multiple of 28.77x, above the industry average of 24.44x and the sector average of 24.77x. Among peers, Amazon trades at a comparable 28.7x but with stronger free cash flow visibility and a diversified earnings base. Nu Holdings and Sea Limited trade at 13.94x and 19.7x, respectively, both at meaningful discounts to MELI despite operating in overlapping markets with improving profitability trajectories. With the investment cycle deepening and no clear timeline for margin recovery, MELI's premium over peers looks difficult to justify.
MELI’s P/E F-12m ValuationZacks Investment Research
Image Source: Zacks Investment Research
Conclusion
MELI's long-term structural opportunity remains intact, but the near-term investment case is difficult to defend. Margins are compressing with no clear recovery timeline; estimates are moving lower, and the stock trades at a premium to peers. MELI currently carries a Zacks Rank #5 (Strong Sell), and investors would be better served avoiding the stock until the investment cycle shows clearer signs of translating into earnings.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
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- Sea Earnings: What To Look For From SE
May 13, 2026
E-commerce and gaming company Sea (NYSE:SE) will be reporting earnings this Tuesday morning. Here’s what to expect.
Sea beat analysts’ revenue expectations last quarter, reporting revenues of $6.82 billion, up 37.2% year on year. It was a mixed quarter for the company, with an impressive beat of analysts’ revenue estimates but a miss of analysts’ EBITDA estimates. It reported 58 million users, up 15.1% year on year.
Is Sea a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.
This quarter, the market is expecting Sea’s revenue to grow 30% year on year, slowing from the 35.2% increase it recorded in the same quarter last year.Sea Total Revenue
The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Sea has a history of exceeding Wall Street’s expectations.
Looking at Sea’s peers in the online marketplace segment, some have already reported their Q1 results, giving us a hint as to what we can expect. EverQuote delivered year-on-year revenue growth of 14.5%, beating analysts’ expectations by 5.7%, and Cars.com reported flat revenue, in line with consensus estimates. EverQuote traded up 63% following the results while Cars.com was also up 4.4%.
Read our full analysis of EverQuote’s results here and Cars.com’s results here.
There has been positive sentiment among investors in the online marketplace segment, with share prices up 6.2% on average over the last month. Sea’s stock price was unchanged during the same time and is heading into earnings with an average analyst price target of $138.27 (compared to the current share price of $86.85).
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- NYSE Content Update: Global Medical Response to Go Public After $479 Million IPO
May 13, 2026
NYSE issues a pre-market daily advisory direct from the trading floor.
NEW YORK, May 13, 2026 /PRNewswire/ -- The New York Stock Exchange (NYSE) provides a daily pre-market update directly from the NYSE Trading Floor. Access today's NYSE Pre-market update for market insights before trading begins.
Ashley Mastronardi delivers the pre-market update on May 13th
Equities are higher Wednesday morning after the Bureau of Labor Statistics released the April PPI report earlier today. Shares of NYSX component Sea Limited (NYSE: SE) rose more than 13% Tuesday after the company reported 38% year-over-year revenue growth. Global Medical Response (NYSE: GMRS) CEO Nick Loporcaro will join NYSE Live to reveal what's next as his company makes its trading debut. Rollins (NYSE: ROL) CFO Kenneth Krause will join Taking Stock to preview the company's 2026 Investor and Analyst Conference later this week.
Opening Bell Global Medical Response (NYSE: GMRS) celebrates its IPO
Closing Bell
Rollins (NYSE: ROL) continues its journey to modernize through growth and innovation
For market insights, IPO activity, and today's opening bell, download the NYSE TV App: TV.NYSE.comNYSE_DisneyNew_York_Stock_Exchange_LogoCision
View original content:https://www.prnewswire.com/apac/news-releases/nyse-content-update-global-medical-response-to-go-public-after-479-million-ipo-302770956.html
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- NYSE Content Update: Global Medical Response to Go Public After $479 Million IPO
May 13, 2026
NYSE issues a pre-market daily advisory direct from the trading floor.
NEW YORK, May 13, 2026 /PRNewswire/ -- The New York Stock Exchange (NYSE) provides a daily pre-market update directly from the NYSE Trading Floor. Access today's NYSE Pre-market update for market insights before trading begins.
Ashley Mastronardi delivers the pre-market update on May 13th
Equities are higher Wednesday morning after the Bureau of Labor Statistics released the April PPI report earlier today. Shares of NYSX component Sea Limited (NYSE: SE) rose more than 13% Tuesday after the company reported 38% year-over-year revenue growth. Global Medical Response (NYSE: GMRS) CEO Nick Loporcaro will join NYSE Live to reveal what's next as his company makes its trading debut. Rollins (NYSE: ROL) CFO Kenneth Krause will join Taking Stock to preview the company's 2026 Investor and Analyst Conference later this week.
Opening Bell Global Medical Response (NYSE: GMRS) celebrates its IPO
Closing Bell
Rollins (NYSE: ROL) continues its journey to modernize through growth and innovation
For market insights, IPO activity, and today's opening bell, download the NYSE TV App: TV.NYSE.comDisney rang NYSE bell from its Upfront on May 12NYSE Logo (PRNewsfoto/New York Stock Exchange)Cision
View original content to download multimedia:https://www.prnewswire.com/news-releases/nyse-content-update-global-medical-response-to-go-public-after-479-million-ipo-302770934.html
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- Sea Limited Q1 Earnings Miss Estimates, Revenues Increase Y/Y
May 13, 2026 · zacks.com
SE's Q1 revenues jump 46.6% on Shopee and Monee growth, but higher costs and credit provisions pressure margins and earnings.
- Wall Street Bulls Look Optimistic About Sea Limited (SE): Should You Buy?
May 13, 2026 · zacks.com
When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important?
- Sea (SE) Is Up 13.7% After Broad-Based Q1 Strength And Record Shopee GMV - What's Changed
May 13, 2026
In the first quarter of 2026, Sea Limited reported revenue of US$7,097.49 million and net income of US$427.94 million, with both basic and diluted earnings per share from continuing operations slightly higher than a year earlier. The results highlighted broad-based strength, as Shopee delivered record gross merchandise value and revenue, Garena posted its best quarter since 2021, and the Money segment expanded into new markets while maintaining disciplined risk management. We’ll now explore how this broad-based strength, particularly Shopee’s record gross merchandise value, affects Sea’s existing investment narrative and longer-term thesis.
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Sea Investment Narrative Recap
To own Sea, you need to believe it can balance Shopee’s scale ambitions, Garena’s cash generation, and Monee’s credit growth without eroding profitability. The latest quarter’s US$7,097.49 million in revenue and record Shopee GMV support the near term growth catalyst in e commerce, while slightly softer EPS versus expectations keeps margin discipline and credit risk in focus as the central near term concerns rather than materially changing them.
One recent move that stands out alongside these results is Sea’s ongoing US$1,000 million share buyback authorization, under which it repurchased 116,200 shares in late 2025. Against a backdrop of strong Q1 2026 revenue and broad based segment strength, this capital return framework sits squarely in the middle of the current catalyst debate: using a still improving balance sheet to reward shareholders while continuing to fund Shopee, Garena, and Monee’s growth needs.
Yet even with this strong quarter, investors should be aware that competition, rising spend and Monee’s expanding loan book could...
Read the full narrative on Sea (it's free!)
Sea's narrative projects $41.3 billion revenue and $3.5 billion earnings by 2029.
Uncover how Sea's forecasts yield a $137.64 fair value, a 43% upside to its current price.
Exploring Other PerspectivesSE 1-Year Stock Price Chart
Before this quarter’s numbers, the most optimistic analysts were assuming Sea could reach about US$46.5 billion in revenue and US$4.8 billion in earnings by 2029, which is a much more upbeat view than the baseline, especially around Shopee’s logistics build out and Monee’s credit expansion. With Q1 2026 coming in ahead on revenue, it is worth asking whether those bullish expectations now look more achievable to you or still too stretched, and how comfortable you are with the very different risk trade offs they imply.
Story Continues
Explore 12 other fair value estimates on Sea - why the stock might be worth just $105.00!
Form Your Own Verdict
Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts.
A great starting point for your Sea research is our analysis highlighting 3 key rewards that could impact your investment decision. Our free Sea research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Sea's overall financial health at a glance.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include SE.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
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- Sea Ltd (SE) Climbs 13% on Strong Q1
May 12, 2026
Sea Ltd. (NYSE:SE) is one of the 10 Stocks With Stunning Gains.
Shopee operator Sea Ltd. snapped a three-day losing streak on Tuesday, soaring 13.14 percent to close at $96.02 as investors cheered its strong earnings performance in the first quarter of the year.
In an updated report, Sea Ltd. (NYSE:SE) grew its net income by 6.7 percent to $438.2 million from $410.8 million in the same period last year.
Photo from Sea Ltd. website
Revenues soared by 46.6 percent to $7.097 billion from $4.841 billion year-on-year.
“We have had a strong start to the year. 2026 is a year where we are leaning in to deepen our competitive moats, while maintaining financial discipline. Our strong revenue growth reflects the effectiveness of these investments, and we are already seeing unit economics start to improve for some of these initiatives,” Sea Ltd. (NYSE:SE) Chairman and CEO Forrest Li said.
Shopee alone recorded $4 billion in gross orders during the quarter, marking a jump of 29.3 percent year-on-year. Revenues stood at $5.1 billion, or 45.1 percent higher.
“Shopee delivered another record-setting quarter, achieving new highs in GMV, gross order volume, and revenue while maintaining financial discipline,” Li said.
Meanwhile, revenues from Monee increased by 57.8 percent to $1.2 billion, thanks to strong consumer and SME credit business. Garena, on the other hand, raked in $696.6 million, marking a 40.6 percent increase from the same period. Bookings finished at $931.4 million, up 20.1 percent year-on-year.
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READ NEXT: 33 Stocks That Should Double in 3 Years and Cathie Wood 2026 Portfolio: 10 Best Stocks to Buy.
Disclosure: None. Follow Insider Monkey on Google News.
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- Sector Update: Consumer Stocks Mixed Late Afternoon
May 12, 2026
Consumer stocks were mixed late Tuesday afternoon with the State Street Consumer Staples Select Sect
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- Sea Stock Jumps After Q1 Results Spark Rally For Slumping Shares
May 12, 2026
Sea stock jumped after the Shopee parent company and southeast Asia e-commerce leader posted strong Q1 results.
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