MercadoLibre, Inc.
Thesis
We recommend a long position in MercadoLibre with a 7–10 year horizon. Although the stock appears expensive on near-term multiples, our base-case DCF indicates significant upside and a strong IRR over the long term, driven by scale advantages in e-commerce, increasing monetization from credit and advertising, and the expansion of Mercado Pago into a comprehensive financial platform.
Did it work?
The pitch for MercadoLibre was based on a long-term horizon of 7-10 years, and with only a short-term price performance of -3.9%, it is too early to determine if the thesis will ultimately succeed or fail. The stock's decline does not provide enough evidence against the long-term potential outlined in the thesis, which focuses on future growth drivers rather than immediate returns.
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