What Could Send MercadoLibre Stock Higher?

MercadoLibre (MELI) stock has lost 28% over the past twelve months, while the S&P 500 returned 16.0%. Yet quarterly sales passed $10 billion for the first time in the second quarter of 2026, and management keeps putting profit back into growth. One of its growth bets is not about selling goods, and it may be what buyers of the stock are counting on. So what is MercadoLibre building beyond its marketplace?

MercadoLibre Is Becoming A Lender To Shoppers

MercadoLibre is lending money to the people who shop and pay on its platform. Its loans to customers reached $16.4 billion in the second quarter of 2026, up 75% from a year earlier. A credit card is part of that push. MercadoLibre issued 2.6 million cards in Brazil in the quarter, against 1.6 million a year before.

On the August 5 call, management said cardholders are 2 to 3 times more likely to use both the marketplace and Mercado Pago, its fintech business. Customers who use both spend 70% more on the marketplace, management said. The number of these customers is growing faster than any other kind of user, at a rate management put at about 37% a year. So MercadoLibre gets more than interest from the card: it gets customers who use more of what it sells.

Lending Is A Fifth Of MercadoLibre’s Revenue

Lending brought in 20% of MercadoLibre’s revenue in fiscal 2025, so it is still the smaller part of the business. But it is outgrowing the company: credit revenue rose 62.7% that year, against 39% for MercadoLibre as a whole.

MercadoLibre stock sits 28.6% below its 52-week high. Even so, it trades at 46.2 times earnings, against 21.5 for the S&P 500. On earnings, that is more than twice the market’s multiple, and on that measure the price appears to assume that MercadoLibre keeps growing fast, lending included.

Are MercadoLibre’s Borrowers Repaying On Time?

So far they are, on the measure management called significantly more relevant to profit: loans 15 to 90 days late. These were 7.0% of the portfolio in the second quarter, which management described as close to historical lows. The margin MercadoLibre earns on its loans after losses also improved, to 21% from 18% in the first quarter.

The worry is about loans that are later still. One question on the August 5 call was about loans more than 90 days overdue, which the questioner said had worsened meaningfully in the quarter. Management replied that it was not concerned, calling it a very small number.

MercadoLibre is also keeping less of its sales as profit: its operating margin was 6.7% in the quarter, down 5.5 percentage points from a year earlier. Management said it is putting long-term investment ahead of near-term profit.

For now, both parts of the lending bet appear to be holding. Cardholders are using more of MercadoLibre, and the share of loans 15 to 90 days late is close to its historical lows. Repayment is the less settled of the two. A share of those loans clearly above 7.0% in the next quarterly report would be the first sign that more of MercadoLibre’s borrowers are falling behind.

Does This Mean You Should Act On MELI?

Our purpose is to inform you with unique data so that you make the right investment decisions. That said, betting on a single stock is always risky, no matter which direction you choose.

There is a smarter approach. Since its inception, the Trefis High Quality (HQ) Portfolio has returned 105%, beating the benchmark that combines the three major indices – the S&P 500, S&P Mid-cap, and Russell 2000. And it did so without taking the concentrated risk that comes with do-it-yourself stock picking. If that is how you want to invest, the HQ Portfolio is the place to start.