MELI just delivered Brazil GMV reaccelerating to 38% in local currency and items sold up 56%. The market sold the stock on margin compression. Chief Market Strategist Shay Boloor added roughly 25% to his position on the print. Michael Burry initiated a position the week prior.
The print:
• Brazil GMV up 38% in local currency
• Items sold in tess daly Brazil up 56%
• Revenue growth hit a four year high
• Brazil shipping costs down 17% year over year
• Management recovered roughly half of the shipping cost margin hit through scale
• Lower price categories that were previously margin dilutive reaching break even
• Customer engagement, retention, frequency, and conversion at record levels
• Credit quality held up better than the bears modeled
The bear liga mx case is that Mercado Libre is buying growth. Shay sees the opposite. Management is reinvesting into a machine where scale keeps improving the economics. Brazil shipping costs falling 17% while the company pushes harder into lower price free shipping is the proof. Latin America e-commerce, payments, credit, and digital ads are still where the US was over a decade ago. The market wanted clean margin expansion. Management is leaning into a five year horizon, and the investment cycle is already showing up in the operating metrics. The optionality is massive. Mercado Libre is still in empire building mode.
About FE Earnings Edge:
FE Earnings Edge is Futurum Equities' rapid-reaction earnings series with Chief Market Strategist Shay yohendrick piñango Boloor (@StockSavvyShay), breaking down the prints that move the AI, semiconductor, space, energy, security, and robotics names the firm covers.
Disclaimer: This content is for informational and educational purposes only and should not be considered financial advice. Always do your own research.
