MercadoLibre Price Target Cut to $2,400 as Q4 Revenues Jump 45%
Wedbush cut MercadoLibre’s price target to $2,400, citing mixed Q4 results and heavy investment spending that may constrain near-term operating income. In Q4 net revenues rose 45% year-over-year, GMV grew 35% in Brazil and Mexico, advertising jumped 67%, and the credit portfolio nearly doubled to $12.5 billion.
1. Price Target Cut and Investment Cycle
Wedbush analyst Scott Devitt lowered MercadoLibre’s price target to $2,400 from $2,600 while maintaining an Outperform rating. The firm pointed to mixed Q4 results and ongoing spending initiatives that are expected to limit operating income upside during the current investment cycle.
2. Strong Q4 Revenue and GMV Performance
In the fourth quarter, net revenues increased 45% year-over-year, driven by 35% gross merchandise volume growth in both Brazil and Mexico. Brazil saw a 45% rise in items sold after targeted investments like a lower free-shipping threshold, and platform AI integrations continued to accelerate commerce momentum.
3. Advertising and Fintech Expansion
Advertising revenue surged 67% due to AI-driven improvements, and the fintech segment sustained user growth with monthly active users up nearly 30% for ten consecutive quarters. The credit portfolio almost doubled to $12.5 billion, and the company issued nearly 3 million new credit cards in the quarter.