u/Last-Cat-7894

MELI reported "absolutely stupid numbers": 47% FX-neutral revenue growth, 52% TPV growth, and 90% credit portfolio growth, while maintaining profitability and strong net interest margins (23% NIMAL). The market is reacting negatively or indifferently to this phenomenal fundamental performance, causing the stock to sell off from what the author already considered a cheap valuation (~30x EV/EBIT). This disconnect between business performance and stock price creates a compelling entry point. The author believes MELI is a "screaming buy" due to its exceptional growth, profitability, widening moat in a large addressable market (LATAM), and a management team focused on long-term investment over short-term margin optimization. Potential risks include margin compression from aggressive investments (e.g., lower free-shipping thresholds), macroeconomic headwinds in Latin America, and increasing competition.

Adobe produced ~$8.3B in true free cash flow (after SBC) over TTM, giving a ~10% yield at a market cap of ~$83B; revenue growing ~10% with stable margins. The market is pricing in a disruption threat that has not materialized in the numbers, creating a value opportunity where the stock trades at single-digit multiples of GAAP earnings. Buy Adobe at a cheap multiple with a wide safety margin, expecting multiple expansion or continued buyback-driven accretion as disruption fears fail to materialize. Actual disruption from AI competitors (e.g., Canva, generative AI tools) accelerates; CFO departure signals deeper cultural/strategic issues; macro slowdown reduces enterprise software spending.