Billionaire Bill Ackman's 2025 Stock Picks: Airbnb and MercadoLibre

Billionaire investor Bill Ackman, founder of Pershing Square Capital Management, has a diverse portfolio with two stocks that Wall Street analysts predict could soar over 20% in 2025: Airbnb (ABNB) and MercadoLibre (MELI). Both companies have strong fundamentals and growth prospects that make them attractive investment opportunities.

Airbnb, the global leader in vacation rentals, has seen its stock price increase by 152% and 237% to surpass Disney and Coca-Cola, respectively, in market capitalization. The company's core business is solid, with nearly 123 million nights and experiences booked in Q3 2024 alone, generating $3.7 billion in revenue and a free-cash-flow margin of 29%. Airbnb's high-upside strategy involves launching new businesses that could generate $1 billion or more in revenue incrementally each year, further driving growth.

MercadoLibre, the dominant e-commerce platform in Latin America, has a market cap of approximately $88 billion and is expected to overtake Disney within the next five years and Coca-Cola within the next 10. The company's e-commerce, logistics, loyalty programs, and advertising segments are all growing at strong double-digit rates. MercadoLibre's financial technology segment is also expanding rapidly, with all metrics growing at strong double-digit rates. The company's diverse business model and robust growth prospects make it an attractive investment opportunity.

Both Airbnb and MercadoLibre have strong earnings growth, revenue growth, and debt-to-equity ratios, supporting their potential for significant growth in 2025. Their innovative business models and expanding market opportunities make them well-positioned to capitalize on emerging trends and continue their impressive growth trajectories. Investors should consider these two stocks as potential additions to their portfolios, given their strong fundamentals and promising growth prospects.

To further illustrate the growth potential of these two stocks, let's examine their valuations compared to their industry peers and historical averages.

Airbnb, Inc. (ABNB):
- P/E Ratio: 46.44
- Forward P/E Ratio: 30.55
- PEG Ratio: 1.78

MercadoLibre, Inc. (MELI):
- P/E Ratio: 27.57
- Forward P/E Ratio: 17.43
- PEG Ratio: 0.97

Industry and Market Averages:
- Leisure and Recreation Services (ABNB's industry): P/E Ratio: 22.5, Forward P/E Ratio: 16.5, PEG Ratio: 0.97
- Internet Content & Information (MELI's industry): P/E Ratio: 25.3, Forward P/E Ratio: 18.2, PEG Ratio: 1.1
- S&P 500: P/E Ratio: 18.5, Forward P/E Ratio: 16.5, PEG Ratio: 1.2

Airbnb's P/E and Forward P/E ratios are higher than its industry peers and the broader market, suggesting that investors may be pricing in significant growth expectations. MercadoLibre's ratios are more in line with its industry peers, but still higher than the broader market, indicating a higher growth potential compared to the average stock. Both stocks' PEG ratios are above 1, suggesting that their expected growth may not be fully reflected in their current valuations. However, investors should consider these ratios alongside other factors, such as earnings growth, revenue growth, and market trends, when making investment decisions.



In conclusion, Airbnb and MercadoLibre are well-positioned to capitalize on their respective markets' growth and expansion opportunities. Their strong fundamentals, innovative business models, and attractive valuations make them compelling investment opportunities for 2025. However, investors should carefully evaluate these stocks' risks and challenges, such as market volatility and regulatory hurdles, before making investment decisions.