MercadoLibre Stock Plunges Below $1,700 Amid Competition and Loan Issues
MercadoLibre's stock has taken a hit in recent times due to increased competition and rising non-performing loans, causing its price to drop below $1,700 per share. However, despite these challenges, the company's revenue growth remains strong, with a 50% increase in the first half of 2026 to $10.2 billion.
The issue lies not in declining profits but rather deferred profits. The company has deliberately cut its margins on the e-commerce side to address rising competition, which will ultimately boost profits as it gains market share. On the fintech side, MercadoLibre's loan portfolio has grown significantly, resulting in a higher number of non-performing loans.
Investors should focus on the long-term potential of MercadoLibre rather than its current nominal price. At $85 billion, its market cap is a tiny fraction of Amazon's $2.7 trillion, indicating significant room for growth. Buying one share at around $1,700 can give investors full voting privileges and fewer restrictions.