Three Reasons We See Opportunity in Investors' Pessimistic Take on MELI's Investment Cycle; MELI Remains Our Top Large-Cap Pick

研报英文原文证据摘录

Three Reasons We See Opportunity in Investors' Pessimistic Take on MELI's Investment Cycle; MELI Remains Our Top Large-Cap Pick

Investment Thesis

We can think of few companies globally that have built as strong a digital ecosystem as MercadoLibre in Latin America, with

leading market share in both e-commerce and fintech. We believe both e-commerce and fintech demonstrate "winner-take-most"

characteristics and MELI will be difficult to displace given its scale, proven ability to execute, and local knowledge. MercadoLibre

generates healthy profit margins, enabling it to invest in new products and services while still maintaining an edge over competitors.CONSUMER We believe future catalysts abound, including offering new financial services, generating advertising revenue, development of new

markets, cross-border and logistics monetization.

AND Upcoming Catalysts Price Performance

■ Seasoning of prior credit card cohorts which generate more profit as they age. $3,500

■ Build out of MELI’s logistics network, which should improve service times and help

MELI maintain market share. $3,000

■ Resumption of looser monetary policy in key geographies, stimulating consumer

demand. $2,500TECHNOLOGY $2,000 Base Case Assumptions: $2,150 Price Target

■ We forecast MELI’s GMV to continue to grow faster than the overall e-commerce $1,500

sector in each of its key geographies. Jul-25 Aug-25 Sep-25 Oct-25 Nov-25 Dec-25 Jan-26 Feb-26 Mar-26 Apr-26 May-26 Jun-26 ■ MercadoCrédito grows strong double-digits over the next several years with solidly

positive net interest margin after losses. MELIS&P 500 (rebased)SERVICES Source: FactSet ■ Older credit card cohorts reach profitability, driving an inflection in net interest

margin after loss ratio as they overwhelm the drag of newer cohorts.