StockNovice (Joe) | February 22, 2026
No prior position. MELI has been on my radar as the kind of business I'd love to own — dominant Latin American marketplace plus fintech flywheel — but I've never pulled the trigger. The valuation has always felt like you're paying for a lot of "could be." That said, the "is" has been getting harder to ignore.
Atlas has it at conviction 4/5 with a Qualifying Pass. I respect that read.
Revenue: $7,409M, +39.5% YoY in Q3 FY25.
That's a reacceleration from Q2's 33.8% trough. Twenty-seven consecutive quarters above 30% growth. That is one of the most remarkable consistency records in the entire universe of growth stocks. Not a lot of companies can say that. I can't think of many at this scale.
Items sold: 635M, +39% YoY. That's not a rounding error — that's an operational machine humming.
Brazil specifically: items sold +42% YoY after MELI reduced the free shipping threshold. Management made a deliberate choice to invest in volume, accepting near-term margin pressure. And Brazil delivered. That's the kind of management action I like to see — thesis-consistent, measurable outcome.
MELI passes emphatically. This is not a story stock.
| Dimension | Assessment |
|---|---|
| Revenue growth at scale | Is — $7.4B run-rate, +39.5% YoY |
| Commerce execution | Is — GMV +28% USD, +35% FX-neutral; 635M items sold |
| Fintech at scale | Is — TPV $71.2B +41%; 72M MAU; $15.1B AUM |
| Credit card profitability | Transitioning — Brazil cohorts >2 years profitable. Still building. |
| Banking license | Could Be — meaningful optionality, not in the numbers yet |
| Advertising scaling | Early Is — affiliate channel 4x YoY; ~11% of revenues on marketing |
The credit card cohort turning profitable in Brazil is the single most important data point in this quarter. That's proof that the credit book isn't just growing — it's maturing into a real business. That flips the credit card story from "could be" to "is in progress."
| Metric | Q3 FY24 | Q4 FY24 | Q1 FY25 | Q2 FY25 | Q3 FY25 | YoY |
|---|---|---|---|---|---|---|
| Revenue ($M) [Non-GAAP incl. fin. income] | ~$5,313 | ~$6,057 | ~$5,938 | ~$5,694 | $7,409 | +39.5% |
| GMV ($B) | ~$12.9 | — | — | — | $16.5 | +28% |
| Items Sold (M) | — | — | — | — | 635 | +39% |
| TPV ($B) | ~$50.6 | — | — | — | $71.2 | +41% |
| Op Margin [Non-GAAP] | ~13.4% | — | — | — | 9.8% | ↓ |
| Net Income ($M) [GAAP] | — | — | — | — | $421 | — |
| EPS [GAAP] | — | — | — | — | $8.32 | — |
| Credit Portfolio ($B) | ~$6.6 | — | — | — | $11.0 | +67% |
| NIMAL | 24.2% | — | — | — | 21.0% | ↓ |
| NPL 15-90 days | — | — | 8.2% | — | 6.8% | Improving |
Operating margin at 9.8% is the lowest on record. This is the thing that makes me nervous — not because the business is broken, but because management has essentially told you they will sacrifice 200-300bps of margin for growth. Fine. I get the logic. But it requires trust.
The trust-building evidence:
The trust-requiring evidence:
Atlas normalized margins at 12-13% to get ~37x P/E. I think that's directionally right. If MELI can sustain high-30s growth while margins recover to the 12-13% range over the next 2-3 years, the stock works. The question is whether I have conviction in that path.
This is the part I spend the most time on. MELI has built a 11.0Bgrossloanportfolio(8.2B net after $2.8B allowance — 25.7% coverage ratio). That's not a fintech feature anymore, that's a bank.
What makes me cautiously optimistic:
What makes me cautious:
The bull case on credit: MELI has data moats (transaction history, payment patterns, marketplace behavior) that traditional banks can't replicate. Their underwriting should be structurally better. Brazil >2yr cohort profitability is evidence of this.
The bear case: credit cycles don't care about data moats when macros turn.
I'm watching this more carefully than anything else about this business.
| Dimension | Before | After |
|---|---|---|
| Revenue trajectory | Consistent compounder | Reacceleration confirmed — stronger |
| Credit book risk | Concerned | Still watching, but improving data |
| Credit card optionality | Speculative | Now showing early proof |
| Margin trajectory | Opaque | Still opaque — needs time |
| Management credibility | High | High — Brazil thesis validated |
| Valuation comfort | Stretched | Fair for the quality; not cheap |
I don't own MELI. After this quarter, I'm moving it up the priority list.
Here's the thing: I've been waiting for a stumble to get in. Stumble hasn't come in 27 quarters. At some point, that's the signal. You don't get a clean entry into companies this dominant.
What I'd want to see before initiating:
If Q4 beats consensus and NPL holds or improves: I'd initiate a small tryout (2-3%). This is not a starter position for me at $2,000/share and 3.9x P/S without owning it and understanding the credit dynamics better.
| Risk | Status | Watch |
|---|---|---|
| Nubank / Shopee / Amazon competition | Active but MELI holding share | GMV growth + items sold |
| Credit cycle deterioration | NPL improving — green | Quarterly NPL trend |
| FX drag masking real growth | FX-neutral +35% vs USD +28% | BRL, MXN rates |
| Margin never recovering | Unresolved | Management commentary + NIMAL trend |
| Banking license delay | Pending — higher funding costs | Regulatory news |
MELI is one of the highest-quality businesses I watch. Twenty-seven straight quarters above 30% growth at $7B+ quarterly revenue. That's exceptional. The credit business is proving out. The platform flywheel is working.
The margin compression is the sticking point for me — not because I think it's permanent, but because the timeline is unclear. Atlas at 4/5 conviction is about right. I'm not there yet on position sizing confidence, but Q4 results (imminent) could change that.
Tryout candidate pending Q4. Watching.
As usual, thanks for reading.
Thesis Status: Watch — Upgrade pending Q4 FY25 results Next check: Q4 FY25 earnings, est. Feb 24, 2026 Atlas baseline: Conviction 4/5 — aligned