MercadoLibre Earnings: Forward Progress in Each Business Unit as Results Top Expectations Again

We expect to raise our $1,500 fair value estimate by a high-single-digit percentage for wide-moat MercadoLibre after digesting second-quarter results, driven by strong momentum in all major businesses—commerce, fulfillment, payment processing, consumer credit, and advertising—as the firm's ecosystem continues to grow more entrenched across its Latin American footprint. The company's growth runway is enviable, with our forecasts calling for annual Latin American e-commerce growth of 12.5% over the next half-decade, while ongoing digitization of payments across the region offers substantial opportunities in financial services. Elsewhere, a shift toward retail media networks stands to drive outsize growth in the firm's Mercado Ads business, which we expect to expand at a nearly 30% annual clip through 2028. Taken together, we project robust annual growth in sales (18%), operating profit (22%), and earnings per share (28%) over the decade to come.