JPMorgan has reaffirmed a neutral rating on MercadoLibre, Inc. (NASDAQ:MELI) as the online commerce platform navigates a shifting competitive landscape. This news, reported on February 4, 2026, follows indications from Shopee that competition may be slowing. Despite maintaining this rating, JPMorgan acknowledges that Shopee’s take rates have become comparable to those of MercadoLibre.
In the third quarter, MercadoLibre reported a net income of $421 million, reflecting a 6% increase from the previous year. However, this figure fell short of analysts’ expectations, which projected net income of $481 million. The shortfall was attributed to adverse currency effects and a notable decline in demand within Argentina.
Despite the challenges, MercadoLibre experienced significant growth in its gross merchandise volume (GMV), which increased by 35% on a currency-neutral basis. This growth contributed to a 39% rise in net sales, bringing the total to $7.4 billion, surpassing market projections. Notably, free shipping initiatives in Brazil proved effective, enhancing customer growth and GMV by 34%. However, these promotions led to a decrease in earnings before interest and taxes (EBIT) margins, which dropped to 9.8%.
Another bright spot was the performance of Mercado Pago, the company’s financial technology segment. Loan balances surged by 83% to $11 billion, while delinquency rates improved, decreasing to 6.8%. Despite these gains, the EBIT for the quarter reached $724 million, again falling below analyst forecasts.
MercadoLibre operates across four geographical segments: Brazil, Argentina, Mexico, and Other Countries. Its comprehensive online commerce platform includes e-commerce and related services, positioning it as a leader in Latin America.
While JPMorgan recognizes the potential risks and opportunities associated with MercadoLibre as an investment, there remains a sentiment that certain artificial intelligence stocks may offer greater returns in a shorter timeframe. The firm highlighted interest in AI stocks that might outperform MercadoLibre and deliver substantial upside potential.
This ongoing situation illustrates the complexities of the digital commerce landscape, where market dynamics can change rapidly. As investors consider their options, the performance metrics of MercadoLibre will likely remain a focal point in discussions about the future of digital currencies and payment solutions.
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