MELI Should I Buy
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MercadoLibre is not a clean buy right now for a beginner long-term investor, even with $50,000-$100,000 available. The business still has strong long-term growth, but the current setup is mixed: price action is constructive, yet valuation/risk sentiment is pressured by margin concerns, recent profit misses, and a securities-law investigation. Since the user is impatient and does not want to wait for a better entry, my direct view is to hold off rather than buy aggressively at this level.
Price closed at 1766.98, slightly above the previous close, with regular session strength and a modest post-market gain. Trend indicators are supportive: MACD histogram is positive and expanding, suggesting bullish momentum. However, RSI_6 at 75.968 indicates the stock is stretched near overbought conditions rather than offering a low-risk entry. Moving averages are converging, which suggests a transition phase rather than a strong breakout confirmation. Key levels: pivot 1670.85, resistance 1 at 1753.26 was reclaimed, and resistance 2 sits at 1804.17. Overall, the short-term trend is bullish but extended.
MercadoLibre still has major long-term growth catalysts: strong Q1 2026 revenue growth of 49%, continued scale in GMV, TPV, credit, and marketplace capabilities, and congressional buying activity that is net positive. Several analysts still maintain Buy/Overweight/Strong Buy ratings despite lowering price targets, which means the Street still sees long-term franchise value. The stock also retains momentum technically above key support levels.
The main negatives are clear: multiple analysts cut price targets after Q1 results, Citi downgraded the stock to Neutral, and several firms highlighted margin pressure from heavy investment and take-rate compression. News also points to profit-growth constraints and that MELI missed profit targets in three of the last four quarters. A federal securities-law investigation is a material event-driven headwind. Options volume showing stronger put activity than call activity adds caution.
Latest quarter: Q1 2026. Financially, MercadoLibre delivered very strong top-line growth with 49% revenue growth and beat estimates on GMV, TPV, and total revenue. However, earnings quality is weaker because profit and margin performance disappointed, and analysts expect continued investment to suppress EBIT in 2026. In short, the latest quarter shows excellent growth but weakening near-term profitability.
Analyst sentiment is still constructive overall but clearly less enthusiastic than before. Goldman Sachs, Morgan Stanley, Barclays, BTIG, Raymond James, and Benchmark all kept bullish ratings, though several lowered price targets. UBS, JPMorgan, Citi, and Daiwa are more cautious, with Citi downgrading to Neutral and JPMorgan/UBS also staying Neutral. The broad message from Wall Street is: strong long-term business, but near-term margin recovery is less certain and the valuation support has weakened.
