I keep buying MercadoLibre (NASDAQ:MELI | MELI Price Prediction) every time the market throws a tantrum about it, and the last two months have handed me plenty of chances.

MercadoLibre's growth story remains intact. Profitability has become the market's bigger concern.

MercadoLibre's AI push reshapes search, fintech, logistics and software development as management points to efficiency gains and incremental revenues.

MercadoLibre remains a Buy, supported by robust ecosystem growth, resilient financials, and a margin of safety in valuation despite recent margin compression. MELI delivered 49% net revenue growth and a 42% GMV increase while continuing to invest heavily in strategic initiatives, accepting near-term margin pressure for long-term advantage. Macro risks persist, notably the potential for higher-for-longer interest rates, competitive pressure, and potential election volatility, but the company's strong balance sheet and market leadership also position it for long-term re-rating.

NEW YORK, July 06, 2026 (GLOBE NEWSWIRE) -- The law firm of Kirby McInerney LLP reminds investors of its investigation on behalf of MercadoLibre, Inc. (“MercadoLibre” or the “Company”) (NASDAQ:MELI) investors concerning the Company's and/or members of its senior management's possible violation of the federal securities laws or other unlawful business practices.

MercadoLibre remains a high-conviction buy, with a 7% portfolio allocation as the stock found technical support at the 50-month/200 DMA and moved higher since. MELI's top-line growth is accelerating due to strategic investments in shipping, credit cards, and 1P commerce, despite ongoing margin compression. Consensus expects 42% revenue growth and a 12% EPS decline in Q2 FY26; beating EPS estimates could trigger a significant rerating as MELI trades 33% below all-time highs.

MercadoLibre continues to demonstrate outstanding performance across its businesses. It's investing in the future, which is putting pressure on the bottom line.

MercadoLibre's revenue grew 49% year over year in the first quarter of 2026. Walmart's advertising business increased 37% in the first quarter of fiscal year 2027.

Mercado Libre's FQ2'26 earnings call may show sequentially weaker margins and higher net debt ratios, as the management intensifies their commerce/logistics/fintech growth initiatives. This is, albeit with the aggressive investments strengthening conversion metrics, improving logistics efficiency, and growing cross-selling across commerce/fintech, lending credence to its high-growth prospects. The recent meltdown has triggered the compelling EV/Sales at 2.35x and PEG ratio at 1.21x, significantly aided by the potential emergence of a technical bottom.

MercadoLibre remains undervalued despite a challenging technical setup and recent underperformance versus Latin American equities and the S&P 500. MELI delivered strong Q1 revenue growth and user engagement, but shares fell sharply due to significant margin compression from aggressive long-term growth investments. I maintain a buy rating on MELI, with a revised fair value estimate of $2,475 based on $55 normalized EPS and a 45x P/E, reflecting robust out-year profit growth.