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Why does $MELI stock keep going down? Three overlapping pressures explain the 22% decline over the past year.
First, margin compression. EBIT margin fell from 12.15% to 6.72% between Q2 2025 and Q2 2026. Revenue grew 49.8%, but the market pays for profitable growth, not just revenue growth.
Second, Brazil risk. With 52.6% of revenue from one country, every political and currency shift hits MercadoLibre stock harder than diversified peers. The October election triggered a 7.8% one-day drop.
Third, credit uncertainty. Mercado Pago's $16.4B credit portfolio grew 75%, but NPLs (15-90 days past due) at 7.0% are worth watching. If credit quality slips in a rising-rate environment, write-offs eat into the growth.
The business is not broken. The market is repricing the risk. Q3 earnings on November 4 will show if the repricing has gone far enough. Could go either way from here.
#MELI #MercadoLibre #StockAnalysis #LatAmStocks #Fintech
Why does $MELI stock keep going down? Three overlapping pressures explain the 22% decline over the past year.
First, margin compression. EBIT margin fell from 12.15% to 6.72% between Q2 2025 and Q2 2026. Revenue grew 49.8%, but the market pays for profitable growth, not just revenue growth.
Second, Brazil risk. With 52.6% of revenue from one country, every political and currency shift hits MercadoLibre stock harder than diversified peers. The October election triggered a 7.8% one-day drop.
Third, credit uncertainty. Mercado Pago's $16.4B credit portfolio grew 75%, but NPLs (15-90 days past due) at 7.0% are worth watching. If credit quality slips in a rising-rate environment, write-offs eat into the growth.
The business is not broken. The market is repricing the risk. Q3 earnings on November 4 will show if the repricing has gone far enough. Could go either way from here.
#MELI #MercadoLibre #StockAnalysis #LatAmStocks #Fintech
First, margin compression. EBIT margin fell from 12.15% to 6.72% between Q2 2025 and Q2 2026. Revenue grew 49.8%, but the market pays for profitable growth, not just revenue growth.
Second, Brazil risk. With 52.6% of revenue from one country, every political and currency shift hits MercadoLibre stock harder than diversified peers. The October election triggered a 7.8% one-day drop.
Third, credit uncertainty. Mercado Pago's $16.4B credit portfolio grew 75%, but NPLs (15-90 days past due) at 7.0% are worth watching. If credit quality slips in a rising-rate environment, write-offs eat into the growth.
The business is not broken. The market is repricing the risk. Q3 earnings on November 4 will show if the repricing has gone far enough. Could go either way from here.
#MELI #MercadoLibre #StockAnalysis #LatAmStocks #Fintech
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