What happened?
Shares of latin American e-commerce and fintech company MercadoLibre (NASDAQ: MELI) fell 14% in the morning session after the company reported third-quarter 2026 financial results, with earnings falling short of Wall Street expectations despite strong top-line growth.
According to a company press release, MercadoLibre reported revenue of $10.75 billion, up 45.1% year on year, and GAAP profit of $8.83 per share. While sales beat Wall Street consensus estimates of $10.64 billion, earnings per share missed expectations of $9.27 by 4.7%. Operating margin contracted to 6.3% from 9.8% in the prior-year period, as gross profit margin decreased to 40.8%. Profitability was squeezed as the company expanded fulfillment capacity by 20% ahead of the peak shopping season to support growth in Brazil.
Additionally, MercadoLibre stepped up spending on affiliate creator channels and marginally tightened credit underwriting in its Mercado Pago fintech arm across higher-risk segments in Brazil and Argentina amid softer industry conditions.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy MercadoLibre? Access our full analysis report here, it’s free.
What is the market telling us
MercadoLibre’s shares are somewhat volatile and have had 13 moves greater than 5% over the last year. But moves this big are rare even for MercadoLibre and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 10 days ago when the stock dropped 11.3% on the news that Brazilian President Luiz Inácio Lula da Silva secured an unexpected runoff victory over conservative challenger Flávio Bolsonaro, reversing weeks of rallies driven by expectations of a business-friendly administration.
MercadoLibre is down 24% since the beginning of the year, and at $1,486 per share, it is trading 35.4% below its 52-week high of $2,302 from November 2025. Investors who bought $1,000 worth of MercadoLibre’s shares 5 years ago would now be looking at only $920.00.
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