u/squirrelmonkey99 ·
Reddit — r/ValueInvesting
· March 04, 2026 at 14:19
· ⬆ 23 pts
· 💬 15 comments
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AI Summary
Summary
The post discusses the competitive pressures facing MercadoLibre (MELI) in its primary market, Brazil, from Amazon (AMZN) and Sea Limited (SE).
The author's thesis is that increased competition will lead to margin compression for MELI in the near term (2026-2027), and therefore, it's better to wait for a lower entry point on the stock rather than buying now.
Quality assessment: This is speculation based on recent news events. The author connects competitive announcements to a potential impact on MELI's future profitability but does not provide a detailed valuation or financial model.
Score23
Comments15
Upvote %93%
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I've been looking to start a position in MELI because I think it's a long-term winner. Yesterday should have been a doozy of a day for MELI but the stock was down "only" 3.5%.
\* Amazon announced 15-minute grocery delivery in Brazil and reiterated that it's one of their top countries for new investments. Brazil is MELI's #1 market.
\* SE announced earnings and its stock dropped 16.5%. Shopee is another important competitor to MELI and identifies Brazil as a core market. The issues with SE's earnings is that the cost of competing has risen (big jump in operating expenses), and higher credit losses.
I expect MELI to defend its business at the cost of near-term profitability. My main takeaway is to expect MELI margin compression for 2026 and maybe into 2027. I think the best option then is to wait for a bigger discount on the stock as this plays out - maybe late 2026/early 2027. Thoughts?