MERCADOLIBRE INC (MELI) Stock Analysis
MERCADOLIBRE INC (MELI) Stock Analysis
Analysis from 10-Q filed 2025-10-30. Data as of Q4 2025.
Overall Grade: F (Concerning)
MERCADOLIBRE INC faces challenges in financial performance that warrant careful analysis.
| Metric | Value | Context |
|---|---|---|
| ROIC | 25.0% | Above industry average |
| FCF Margin | 37.3% | Strong cash generation |
| Debt/Equity | 0.7x | Moderate leverage |
Investment Thesis: Strong return on invested capital of 25.0% suggests durable competitive advantages and efficient capital allocation.
Explore MERCADOLIBRE INC: Earnings History | Filing Intelligence | ROIC Analysis
Profitability: MERCADOLIBRE INC earns 25.0% ROIC, Top 25% in Technology
MERCADOLIBRE INC's trailing-twelve-month ROIC of 25.0% ranks Top 25% in Technology companies (sector median: 5.2%), driven by NOPAT margin of 7.8% combined with asset turnover of 0.9x. Source: 10-Q filed 2025-10-30. Gross margin of 44.5% with operating margin at 11.1% reflects strong pricing power.
| Metric | MELI | Rating | Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 25.0% | Excellent | Above sector median of 5.2% |
| Return on Equity (ROE) | 35.5% | Excellent | Efficient use of shareholder equity |
| Gross Margin | 44.5% | Good | Strong pricing power |
| Operating Margin | 11.1% | Good | Moderate operational efficiency |
Cash Flow: MERCADOLIBRE INC generates $10.8B FCF at 37.3% margin, positive NaN/8 quarters
MERCADOLIBRE INC generated $10.8B in free cash flow (TTM), a 37.3% FCF margin, a margin that ranks Top 5% in Technology. Operating cash flow exceeds net income by 6.1x, indicating high earnings quality. FCF was positive in N/A of the last 8 quarters. Source: 10-Q filed 2025-10-30.
| Metric | MELI | Rating | Context |
|---|---|---|---|
| Free Cash Flow Margin | 37.3% | Excellent | Excellent cash conversion |
| Free Cash Flow (TTM) | $10.8B | Good | Positive cash generation |
| OCF/Net Income | 6.1x | Excellent | High earnings quality |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
Balance Sheet: MERCADOLIBRE INC at 0.7x leverage
MERCADOLIBRE INC's debt-to-equity ratio of 0.7x reflects moderate leverage. Total debt of $4.6B offset by $206.0M in cash. Source: 10-Q filed 2025-10-30.
| Metric | MELI | Rating | Context |
|---|---|---|---|
| Debt to Equity | 0.7x | Good | Moderate leverage |
| Net Cash Position | $-4.4B | Warning | Net debt position |
Valuation: MERCADOLIBRE INC trades at 51.1x earnings
MERCADOLIBRE INC trades at a P/E of 51.1x. Free cash flow yield of 10.5% offers attractive cash returns relative to price.
| Metric | MELI | Rating | Context |
|---|---|---|---|
| P/E Ratio | 51.1x | Warning | Premium valuation |
| EV/Sales | 3.6x | Good | Growth premium priced in |
| FCF Yield | 10.5% | Excellent | Attractive cash return |
Capital Allocation: MERCADOLIBRE INC returns 0.0% shareholder yield
MERCADOLIBRE INC's total shareholder yield is 0.0% (dividends + buybacks). Source: 10-Q filed 2025-10-30.
| Metric | MELI | Rating | Context |
|---|---|---|---|
| Total Shareholder Yield | 0.0% | Warning | Dividend + buyback yield combined |
| Total Capital Returned (TTM) | $0 | Adequate | Dividends + buybacks returned to shareholders |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 25.0% | Top 25% | 4.8x above |
| Free Cash Flow Margin | 37.3% | Top 5% | 4.1x above |
| Gross Margin | 44.5% | Bottom 50% | 0.9x below |
| Operating Margin | 11.1% | Top 50% | 2.3x above |
| Return on Equity (ROE) | 35.5% | Top 25% | 7.3x above |
| P/E Ratio | 51.1x | N/A | - |
Financial Scorecard
| Metric | MELI | Rating | Sector Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 25.0% | Excellent | Top 25% of sector (median: 5.2%) |
| Free Cash Flow Margin | 37.3% | Excellent | Top 5% of sector (median: 9.1%) |
| Gross Margin | 44.5% | Good | Bottom 50% of sector (median: 51.8%) |
| Debt to Equity Ratio | 67.7% | Good | Moderate leverage |
| P/E Ratio (Price-to-Earnings) | 51.1x | Warning | High expectations priced in |
| Free Cash Flow Yield | 10.5% | Excellent | High cash return |
Frequently Asked Questions
Q: What is MERCADOLIBRE INC's Return on Invested Capital (ROIC)?
MERCADOLIBRE INC (MELI) has a trailing twelve-month Return on Invested Capital (ROIC) of 25.0%. This compares above the sector median of 5.2%. An ROIC above 20% indicates exceptional capital efficiency and strong competitive advantages.
Q: What is MERCADOLIBRE INC's Free Cash Flow Margin?
MERCADOLIBRE INC (MELI) has a free cash flow margin of 37.3%, generating $10.8 billion in free cash flow over the trailing twelve months. A FCF margin above 20% indicates excellent cash conversion and a high-quality business model.
Q: Is MERCADOLIBRE INC stock overvalued or undervalued?
MERCADOLIBRE INC (MELI) trades at a P/E ratio of 51.1x, which is above the sector median of N/A. The EV/Sales multiple is 3.6x. Free cash flow yield is 10.5%, which represents an attractive cash return to investors.
Q: How much debt does MERCADOLIBRE INC have?
MERCADOLIBRE INC (MELI) has a debt-to-equity ratio of 0.7x with total debt of $4.6 billion. Net debt position is $4.4 billion.
Q: What is MERCADOLIBRE INC's revenue and earnings growth?
MERCADOLIBRE INC (MELI) grew revenue by 39.1% year-over-year. Earnings per share increased by 4.5% compared to the prior year. Double-digit revenue growth indicates strong demand and market share gains.
Q: How does MERCADOLIBRE INC compare to competitors in Technology?
Compared to other companies in Technology, MERCADOLIBRE INC (MELI) shows: ROIC of 25.0% is above the sector median of 5.2% (Top 13%). FCF margin of 37.3% exceeds the sector median of 9.1% (Top 3% of sector). Gross margin at 44.5% is 7.3 percentage points lower than sector peers. These rankings are based on MetricDuck's analysis of all Technology companies with available SEC filings.
Q: What warning signs should I watch for with MERCADOLIBRE INC?
Investors in MERCADOLIBRE INC (MELI) should monitor these potential warning signs: 1) ROIC has been declining, potentially signaling deteriorating competitive position. Regular monitoring of SEC filings and quarterly trends is recommended.
Data Source: Data sourced from 10-Q filed 2025-10-30. TTM metrics as of Q4 2025.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.
This analysis is for informational purposes only and does not constitute investment advice.