MercadoLibre Shares Drop Following Third-Quarter Earnings Miss Due to Increased Investment
MercadoLibre (MELI) shares fell 12% on November 5 after third-quarter earnings missed analyst expectations. While revenue grew 45% year-over-year to $10.75 billion, earnings per share of $8.83 fell short of the projected $9.30. The decline in profitability was primarily driven by strategic investments in fulfillment capacity, increased marketing spending in Brazil, and expanded free shipping offerings. Despite the margin compression, the company's underlying growth metrics remain robust. Gross merchandise volume rose 33% on a currency-neutral basis, and total payment volume through Mercado Pago surged 53% to $109 billion. Management indicated that current costs are tied to capacity building and expects margins to recover in the upcoming quarter. Additionally, credit quality remains stable despite a 62% expansion in the lending portfolio.
Tickers: $MELI
Topics: earnings report e-commerce fintech revenue growth stock price decline