Mercadolibre Plunges 2.9% Amid Earnings Miss and Fintech Margin Pressures—Is the Sell-Off a Buying Opportunity?

Summary
• Mercadolibre (MELI) trades at $2,346.99, down 2.9% intraday after missing Q2 EPS estimates by $1.70.
• Institutional investors like Edmond DE Rothschild S.A. boosted stakes by 62.7%, signaling long-term conviction.
• Analysts maintain a 'Moderate Buy' rating, with a $2,817.22 consensus price target.

Today’s sharp selloff in Mercadolibre reflects a mix of near-term earnings disappointment and broader fintech margin pressures. Despite a 33.8% revenue surge, the stock’s intraday range of $2,298.04 to $2,371.14 highlights volatile investor sentiment. With the internet retail sector showing mixed momentum, MELI’s move raises critical questions about its near-term trajectory.

Earnings Disappointment and Fintech Margin Pressures Fuel Selloff
Mercadolibre’s 2.9% intraday decline stems from a $1.70 EPS shortfall in Q2 2025, despite a 33.8% year-over-year revenue increase to $6.79 billion. The fintech segment, a key growth driver, faces margin compression from rising competition and regulatory scrutiny. Analysts at Barclays and JPMorgan have adjusted price targets downward, citing valuation concerns. Meanwhile, institutional investors like Edmond DE Rothschild S.A. and Brooklyn Investment Group have increased stakes, suggesting confidence in long-term fundamentals despite near-term turbulence.

Internet Retail Sector Mixed as Amazon Gains Momentum
The internet retail sector remains fragmented, with Amazon (AMZN) leading the charge with a 1.58% intraday gain. MELI’s selloff contrasts with Amazon’s resilience, highlighting divergent investor perceptions of growth sustainability. While MELI’s fintech expansion faces margin pressures, Amazon’s logistics and AI-driven retail innovations continue to attract capital. This sector divergence underscores the importance of differentiating between high-growth fintech plays and established e-commerce leaders.

Technical Setup and Options Plays for MELI’s Volatile Move
• 200-day MA: $2,172.21 (well below current price)
• RSI: 53.24 (neutral, no overbought/oversold signal)
• MACD: 9.06 (bullish divergence from signal line at 3.94)
• Bollinger Bands: Upper at $2,479.12, Middle at $2,380.35, Lower at $2,281.58 (price near lower band)

MELI’s technicals suggest a short-term bearish trend but long-term bullish setup. Key support levels at $2,335.45 (30D support) and $2,281.58 (lower Bollinger band) could dictate near-term direction. The 53.24 RSI reading indicates no immediate overbought/oversold conditions, but the MACD histogram’s positive divergence hints at potential short-covering rallies. With no leveraged ETF data available, focus remains on options.

Top Options Plays:
• MELI20250926C2352.5 (Call, $2,352.50 strike, 9/26 expiry):
- IV: 0.26% (low volatility)
- Delta: 0.0105 (low sensitivity to price moves)
- Theta: -0.0541 (high time decay)
- Gamma: 0.0198 (moderate sensitivity to price acceleration)
- Turnover: 0 (no liquidity)
- Leverage: 468,850% (extreme, but impractical for trading)
- Payoff at 5% downside ($2,230): $0 (strike above current price)
- Why it stands out: Theoretical high leverage, but zero turnover renders it unusable.

• MELI20251024C2360 (Call, $2,360 strike, 10/24 expiry):
- IV: 0.17% (low volatility)
- Delta: 0.0103 (low sensitivity)
- Theta: -0.0214 (moderate time decay)
- Gamma: 0.0190 (moderate sensitivity)
- Turnover: 0 (no liquidity)
- Leverage: 468,850% (extreme)
- Payoff at 5% downside ($2,230): $0 (strike above current price)
- Why it stands out: Longer expiry offers time for recovery, but zero turnover and low IV make it impractical.

Trading Insight: Aggressive bulls may consider a long call into a bounce above $2,371.14 (intraday high), but liquidity constraints in the options chain limit actionable plays. A short-term bearish setup suggests targeting $2,281.58 (lower Bollinger band) as a critical support level.

Backtest Mercadolibre Stock Performance
Below is the event-based back-test you requested. (Assumptions: because true intraday tick data is not available via current tool-set, a “-3 % intraday plunge” has been approximated as any trading day where the closing price is ≥ 3 % lower than that day’s opening price. 86 such events were detected between 2022-01-01 and 2025-09-08.)Key take-aways • Average cumulative return after the plunge turns positive within 2 trading days and remains so through 30 days, reaching ≈ +3.7 %. • Win-rate fluctuates around 55 %, peaking near 59 % on day 15, indicating only a modest edge. • None of the day-by-day abnormal returns reach conventional statistical significance; therefore, buying immediately after a 3 % drop has not produced a reliably exploitable pattern in the tested period.You can explore the complete event-study charts and metrics in the interactive panel below.Feel free to open the module, inspect the interactive graphs, and let me know if you’d like to adjust the event definition, test a different holding horizon, or add risk-control overlays.

MELI’s Selloff: A Tactical Entry Point or a Cautionary Tale?
Mercadolibre’s 2.9% decline reflects near-term earnings concerns but leaves long-term fundamentals intact. With a 58.5 PE ratio and 33.8% revenue growth, the stock remains attractively valued relative to its 52-week high of $2,645.22. The options chain’s lack of liquidity and extreme leverage ratios highlight the need for caution, but the technical setup suggests a potential rebound from key support levels. Investors should monitor Amazon’s 1.58% gain as a sector barometer and watch for a break below $2,335.45 to confirm bearish momentum. For now, a wait-and-see approach with a focus on $2,281.58 support appears prudent.