MercadoLibre (MELI.O): Adding Downside 30-Day Catalyst Watch

Research evidence excerpt

MercadoLibre (MELI.O): Adding Downside 30-Day Catalyst Watch

<br>The following factors could prevent MercadoLibre's shares from achieving

our target price:<br><br>1) Complex reporting. The company operates in 18 different countries and territories, with financial

reporting in USD. Therefore, its financials are subject to foreign currency movements, which constitutes both upside and

downside risks. Important currencies for the company include the BRL, MXN, and ARS, which have demonstrated meaningful

volatility in the context of global currency markets.<br><br>2) Concentration. More than half of revenues are generated in

Brazil; MELI is meaningfully exposed to conditions governing the consumer environment in Brazil, which may constitute an

upside or downside risk.<br><br>3) Growth expectations. Sales growth is dependent on the continuous growth of online

commerce and Internet usage in Latin America, as well as the company's ability to expand its operations, to adapt rapidly to

changing technologies, to capture consumer trends, to attract new customers, and to retain existing customers.<br><br>4)

System stability. MercadoLibre's website is exposed to security breaches and illegal users of its services, as well as systems

interruptions or failures, which may constitute a downside risk.<br><br>5) Competition with other players in the marketplace

sector, acquirers, fintechs, and banks.<br><br>If the impact on the company from any of these factors proves to be less than

we anticipate, the stock could materially outperform our target. Conversely, if the impact on the company from any of these

factors proves to be greater than we anticipate, the stock could underperform our target price.