MercadoLibre 3Q25: Strong Growth but Profitability Under Pressure

Margin pressure and heavier spending constrain near-term performance; we maintain a Neutral view as spreads already reflect credit strength.

We maintain a Neutral recommendation on MELI’s bonds, as relative value comparisons place them close to fair value, albeit on the expensive side. MELI’s broad Latin American footprint and significant exposure to higher-risk markets reinforce our view that spreads already price in much of the company’s credit strength, leaving limited room for further tightening. Our outlook lacks a clear catalyst for additional spread compression, and we expect margin pressure from new marketing and shipping initiatives to persist. In the near term, performance is likely to remain constrained by heavier spending in Brazil and elevated investment intensity across the ecosystem. While credit metrics remain broadly healthy, they are being tested by ongoing margin pressure, higher leverage, and a tighter liquidity profile.