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Investing.com - Benchmark lowered its price target on MercadoLibre (NASDAQ:MELI) to $2,780.00 from $2,875.00 on Thursday, while maintaining a Buy rating on the Latin American e-commerce giant. The stock currently trades at $2,400.43, with analyst targets ranging from $2,170 to $3,500, according to InvestingPro data.
The price target reduction follows MercadoLibre’s third-quarter results, which showed the company outperforming expectations with broad-based acceleration across unique buyers, gross merchandise volume (GMV), total payment volume (TPV), and revenue in both commerce and fintech segments. The company has maintained impressive 35.8% revenue growth over the last twelve months, reaching $24.1 billion with a robust gross profit margin of 51.5%.
MercadoLibre ’s strong execution was attributed to ongoing investments in logistics, first-party sales, and marketing initiatives, with the company’s decision to lower Brazil’s free shipping threshold notably sparking increased buyer activity and market momentum.
Despite the top-line strength, profitability lagged and missed expectations as margins came under pressure, compounded by Argentina’s volatile macroeconomic environment, leading Benchmark to lower its fiscal year 2026 margin outlook. The stock currently trades at a high P/E ratio of 59.3, which InvestingPro analysis suggests is elevated relative to near-term earnings growth.
Benchmark expects MercadoLibre to continue prioritizing growth over margins, with momentum driven by deeper penetration in Brazil’s value segments, sustained strength in Mexico, and potential improvement in Argentina post-election, alongside robust fintech performance. With a market cap of $122 billion and an overall "GREAT" financial health score from InvestingPro, the company remains a prominent player in the Broadline Retail industry.
In other recent news, MercadoLibre reported its third-quarter 2025 earnings with a mixed performance. The company revealed an earnings per share (EPS) of $8.32, which was a 22.39% miss compared to the forecasted $10.72. However, revenue reached $7.41 billion, exceeding the anticipated $7.19 billion. Despite the earnings miss, the company’s revenue performance was a positive highlight. Cantor Fitzgerald adjusted its price target for MercadoLibre to $2,750 from $2,900 due to margin pressure, while maintaining an Overweight rating. Meanwhile, BTIG reiterated its Buy rating with a $2,750 price target, noting strong gross merchandise volume (GMV) growth. Both firms acknowledged the robust revenue figures, although operating income and EBITDA did not meet consensus expectations. These developments reflect the company’s ongoing challenges and achievements in its financial performance.
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