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MercadoLibre, Inc. (MELI) reported its third-quarter earnings for 2025 on [insert date], with revenues reaching $7.41 billion, marking a 39.5% increase year-over-year and surpassing the Zacks Consensus Estimate by 2.15%. However, earnings of $8.32 per share fell short of expectations by 11.77%, signaling challenges amid growth.
The operating income grew 30% year-over-year to $724 million, but the operating margin decreased to 9.8% from 10.5%. Notably, Brazil’s free-shipping threshold was lowered from R$79 to R$19, boosting sales volume by 42%, yet creating higher fulfillment expenses, resulting in a gross margin contraction to 49% from 52%. In Argentina, local currency growth of 97% was heavily influenced by inflation, alongside foreign-exchange losses doubling year-over-year.
MELI faces intensified competition from Amazon and Nubank, which are encroaching on its market share in both e-commerce and fintech. The Zacks consensus estimate for MELI’s fourth-quarter earnings is projected at $12.28 per share, a year-over-year decline of 2.62%. With tightening margins and growing competitive pressures, MELI’s stock is deemed overvalued at a price-to-earnings ratio of 38.44, compared to the industry average of 26.22.
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