MELI stock was battered on Wednesday, even after better-than-expected revenue, as a profit miss weighed on investor sentiment.
- Lupton said in a post on X that it was “kind of laughable” to see MELI stock down after growing revenues by 45% year-over-year in the fourth quarter.
- Wedbush said the expected level of spend will remain an overhang on shares, and that upside to operating income will likely be limited in the near term as the company's investment cycle becomes better understood.
- Cantor Fitzgerald also cut its price target on MercadoLibre to $2,400 from $2,750, but noted that its fundamental bullish outlook remains intact.
Shares of MercadoLibre closed more than 8% lower on Wednesday, marking its worst day since late November. But the CEO and CIO of Lupton Capital, Jonah Lupton, noted that the company was “still a compelling growth story” and that it should not be trying to maximize profits right now.
Investors are concerned about the company’s margin squeeze resulting from investments in scaling AI-based growth and advertising technology, even as the company reports a revenue surge.
Lupton said in a post on X that it was “kind of laughable” to see MELI stock down after growing revenues by 45% year-over-year in the fourth quarter and was on track to do another 30% to 35% revenue growth in calendar year 2026.
“$MELI looks attractive to me at less than 20x NTM EBITDA with a strong moat and best-in-class management team. The only negative in the earnings report was related to margin compression from bigger investments into new products, logistics, infrastructure, etc which is exactly what they should be doing,” Lupton said in the post.
He added that “the market is being short-sighted” and MELI stock was “finally a top 12 position.”
Wall Street’s View On MELI
BTIG lowered the firm's price target on MercadoLibre to $2,650 from $2,750, according to TheFly. The firm noted that the company’s results handily exceeded Gross Merchandise Value and Total Payment Volume expectations, though the 500 bps to 600 bps of margin investment led to a miss on profit measures.
The firm added that while the market may still need to recalibrate its expectations for MercadoLibre's level of investment, the degree to which these investments are paying off leaves BTIG confident that shareholder value creation is there.
Cantor Fitzgerald also cut its price target on MercadoLibre to $2,400 from $2,750, but noted that its fundamental bullish outlook remains intact.
Wedbush analyst Scott Devitt trimmed the firm's price target on MercadoLibre to $2,400 from $2,600 and said he believes the expected level of spend will remain an overhang on shares, and that upside to operating income will likely be limited in the near term as the company's investment cycle becomes better understood.
Wall Street, on average, has a ‘Strong Buy’ rating on the stock, according to Koyfin, with 24 out of 26 analysts rating the shares ‘Buy’ or higher and two analysts rating it ‘Hold.’ The average price target of MELI stock was $2,741, implying a 55% upside to Wednesday’s closing price of $1,767.71.
What Is Retail Thinking About MELI?
Retail sentiment on MercadoLibre jumped to ‘extremely bullish’ from ‘neutral’ a week ago, with message volumes at ‘extremely high’ levels, according to data from Stocktwits.
A bullish user on Stocktwits noted that they plan to hold the stock “indefinitely.”
In the last 24 hours, the retail message volume on the stock jumped 67% on Stocktwits, and over the past three months, the ticker has seen a more than 3% spike in followers on the platform.
Another user said that MELI stock was a “steal” at the current price of $1,767.71.
Shares of MercadoLibre have declined by more than 18% over the last 12 months.
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