MercadoLibre shares drop 35% amid margin concerns but show 20-29% upside potential.

MercadoLibre's stock has fallen over 35% from its 2025 peak due to worries about shrinking profit margins caused by heavy investments in logistics and payments. Despite this, the company reported a strong 49% revenue growth in Q1 2026, focusing on expanding market share in Latin America's growing e-commerce sector. An analyst estimates MercadoLibre's sustainable net margin at 6.5%-7.0%, valuing the stock between $2,030 and $2,185 per share, suggesting a 20-29% upside from current prices. The company's strong earnings rate and dominant market position support its potential as a long-term growth investment.