Mercadolibre Slides 1.52% with 53rd-Ranked Volume as Q4 Earnings Miss Weighs on Profits Despite 30% Revenue Surge

Market Snapshot

Mercadolibre (MELI) closed February 26, 2026, with a 1.52% decline in its stock price, reflecting a continuation of recent volatility. Trading volume for the day reached 1.90 billion, a 54.28% drop compared to the previous trading session, placing it 53rd in market activity. The stock’s performance followed the release of Q4 2025 earnings on February 24, which fell short of analyst expectations. Despite a 30% year-over-year revenue increase to $8.76 billion, earnings per share (EPS) of $11.03 missed the estimated $11.57 by 4.67%, contributing to the downward pressure on the stock.

Key Drivers

The earnings miss in Q4 2025 was a primary catalyst for the stock’s decline. Analysts had projected strong performance based on prior quarters, such as the 56.65% EPS beat in Q4 2024 ($12.61 vs. $8.05). However, the recent report highlighted operational challenges, including margin compression from accelerated investments in logistics, incentives, and fintech services. These strategic expenditures, while positioning Mercadolibre for long-term growth in Latin America, temporarily pressured profitability. The 4.67% shortfall in EPS estimates directly triggered the post-earnings sell-off, with shares falling in after-hours trading.

Despite the earnings disappointment, revenue outperformed expectations, growing 30% YoY to $8.76 billion. This resilience underscored the company’s dominance in e-commerce and fintech, particularly in Brazil, Mexico, and Argentina. The 4.16% revenue surprise (actual vs. forecast of $8.41 billion) demonstrated the effectiveness of initiatives like Mercado Ads and expanded credit offerings. However, the market prioritized short-term profitability over top-line growth, amplifying the stock’s decline.

Another critical factor was the company’s focus on AI integration and infrastructure. News articles emphasized ongoing investments in AI-driven marketing platforms and logistics optimization, which analysts view as foundational for maintaining market share. While these initiatives were cited as long-term positives, they also contributed to near-term margin pressures. The stock’s decline reflected investor concerns about the trade-off between growth and profitability, particularly in a sector where earnings consistency is a key valuation metric.

Institutional activity further influenced sentiment. SQUADRA Investments, a Brazilian fund, acquired 89,656 shares of Mercadolibre in early February, signaling confidence in its long-term potential. This move contrasted with the immediate post-earnings sell-off, highlighting divergent views between short-term traders and long-term investors. Analysts noted that SQUADRA’s investment accounted for 33.8% of its reportable assets, suggesting a strategic bet on the company’s ability to navigate competitive pressures and economic shifts in Latin America.

The broader market environment also played a role. Mercadolibre’s stock has historically been volatile, with a beta of 1.45, making it more sensitive to market swings. Recent economic improvements in Argentina and Venezuela, coupled with the company’s AI-driven risk management strategies for bad loans, were seen as potential tailwinds. However, these factors did not offset the immediate impact of the earnings miss, which dominated investor sentiment. Analysts remain cautiously optimistic, with a maintained “Overweight” rating from Barclays and a revised price target of $2,600, reflecting confidence in the company’s growth trajectory despite near-term headwinds.

In summary, Mercadolibre’s Q4 earnings report highlighted a mixed performance: strong revenue growth and strategic investments contrasted with a significant EPS shortfall. The stock’s 1.52% drop on February 26 reflected investor prioritization of short-term profitability and margin concerns, while institutional confidence in long-term growth through AI and market expansion suggests resilience ahead of the May 6, 2026 earnings call.