MercadoLibre's Stock Price Drops 16% in the First Half of the Year

MercadoLibre MELI shares fell 16% in the first half of 2026 despite strong operating results, illustrating a widening gap between growth and profitability at the Latin American e-commerce and fintech giant. Total revenue rose 49% year-over-year in the first quarter, with total payment volume up 50% and monthly active users climbing 29% to 83 million.

The disconnect: operating income fell 20% from a year earlier, and operating margin compressed to 6.9% from 12.9%, driven by heavier promotional e-commerce activity in Brazil and a jump in debt provisions tied to the company's fintech lending arm. Investors have penalized the stock for the margin erosion even as top-line growth remains among the fastest of any large-cap consumer internet company globally.

The setup leaves MercadoLibre at a valuation inflection point: bulls point to sustained 49% revenue growth and a still-underpenetrated Latin American e-commerce and credit market, while bears focus on whether management can convert that growth into durable margin expansion rather than continued promotional and credit-provisioning drag.

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