MELI Plummets 3.07% Amid Earnings Disappointment and Fintech Margin Pressures—Is This a Buying Opportunity?

Summary
• Mercadolibre (MELI) trades at $2,333.99, down 3.07% intraday after reporting Q2 earnings below estimates.
• The stock is trading near its 52-week low of $1,646 and 52-week high of $2,645.22.
• Analysts remain bullish, citing 300% growth over two years and a 50% upside forecast.

Today’s sharp decline in MELI reflects mixed Q2 results, with earnings missing estimates due to margin compression from aggressive fintech and infrastructure investments. Despite the pullback, institutional ownership remains robust at 90%, and technical indicators suggest a potential rebound near key support levels.

Earnings Miss and Margin Contraction Spur Sell-Off
Mercadolibre’s Q2 earnings shortfall—GAAP earnings of $10.31 vs. $12.01 estimated—triggered immediate selling pressure. The 210-basis-point margin contraction, attributed to strategic investments in fintech expansion and infrastructure, alarmed investors prioritizing short-term profitability. While revenue surged 34% year-over-year, the earnings miss highlighted near-term trade-offs for long-term growth. Analysts, however, emphasize that these investments are driving top-line acceleration, with fintech growth outpacing core e-commerce by 11 percentage points.

Internet Retail Sector Mixed as Amazon Outperforms
The Internet Retail sector remains fragmented, with Amazon (AMZN) surging 3.64% on stronger-than-expected Q2 results. Etsy (ETSY) and eBay (EBAY) traded flat to slightly negative, while MELI’s 3.07% decline underperformed sector peers. Amazon’s 32x P/E vs. MELI’s 58.17x P/E highlights divergent growth expectations. However, MELI’s fintech-driven 40% user growth and 30%+ e-commerce acceleration suggest long-term outperformance potential if margin pressures stabilize.

Bullish Setup for ETFs and Options Amid Key Support Levels
• 200-day average: $2,132.72 (below current price)
• RSI: 50.51 (neutral)
• MACD: -17.22 (bullish histogram divergence)
• Bollinger Bands: Lower band at $2,336.82 (near current price)

MELI is testing critical support at $2,336.82 (lower Bollinger Band) and the 200-day MA. A rebound above $2,455.94 (intraday high) could trigger a short-term rally toward $2,645.22 (52-week high). The KraneShares 2x Long MELI Daily ETF (KMLI), though down 6.34%, offers leveraged exposure to a potential bounce.

Top Options Contracts:
• MELI20250905C2340
- Call Option, Strike: $2,340, Expiry: 2025-09-05
- IV Ratio: 0.00% (neutral), Delta: 0.35 (moderate sensitivity), Theta: -1.11 (high time decay), Gamma: 17.43 (high sensitivity to price moves), Turnover: 0 (low liquidity)
- Leverage Ratio: 466,324% (extreme), Price Change Ratio: 0.00%
- This contract offers high gamma and leverage but is illiquid. A 5% downside to $2,217.29 would result in a payoff of $0 (strike not breached).

Aggressive bulls should monitor the $2,340 strike for a breakout above the 200-day MA. If MELI closes above $2,455.94, consider adding long calls with a 30-day expiry.

Backtest Mercadolibre Stock Performance
After a -3% intraday plunge, MELI has historically shown positive short-to-medium-term gains. The backtest data reveals favorable win rates and returns for 3, 10, and 30 days following the event, with the maximum return reaching 7.14% over 30 days. This indicates that while the stock may experience a brief dip, it often rebounds and can deliver decent returns in the subsequent weeks.

MELI at Pivotal Support—Buy the Dips or Wait for Clarity?
Mercadolibre’s 3.07% decline has brought it to a critical juncture near its lower Bollinger Band and 200-day MA. While margin pressures persist, the stock’s 34% revenue growth and fintech momentum suggest a rebound is plausible if institutional buying resumes. Watch for a break above $2,455.94 to confirm a short-term reversal. Meanwhile, Amazon’s 3.64% gain underscores sector strength—use MELI’s volatility as a high-conviction trade. Act now: Buy MELI20250905C2340 if $2,340 holds, or wait for a close above $2,455.94 for a safer entry.