latamstocks

MercadoLibre stock dropped 7.8% on October 26 after Brazil's presidential runoff, while the S&P 500 rose 0.7%. No company news, no earnings miss. The sell-off was pure political risk sentiment.

Brazil provides roughly 52.6% of MercadoLibre's revenue, so any policy shift there hits the stock harder than its peers. PayPal fell 3.6% the same day; Amazon gained 0.4%. The gap shows how much country concentration matters.

What did not change: Mercado Pago's credit portfolio at $16.4 billion (up 75% YoY), Q2 revenue of $10.17 billion (up 49.8%), and 19% growth in items per buyer. None of these metrics shifted because of one election. Holding through headline noise and waiting for the Q3 earnings on November 4 made more sense to me than reacting to a political outcome. Not a guaranteed approach; yours may differ.

#MELI #MercadoLibre #BrazilElection #LatAmStocks #Fintech

Why does $MELI stock keep going down? Three overlapping pressures explain the 22% decline over the past year.
First, margin compression. EBIT margin fell from 12.15% to 6.72% between Q2 2025 and Q2 2026. Revenue grew 49.8%, but the market pays for profitable growth, not just revenue growth.
Second, Brazil risk. With 52.6% of revenue from one country, every political and currency shift hits MercadoLibre stock harder than diversified peers. The October election triggered a 7.8% one-day drop.
Third, credit uncertainty. Mercado Pago's $16.4B credit portfolio grew 75%, but NPLs (15-90 days past due) at 7.0% are worth watching. If credit quality slips in a rising-rate environment, write-offs eat into the growth.
The business is not broken. The market is repricing the risk. Q3 earnings on November 4 will show if the repricing has gone far enough. Could go either way from here.
#MELI #MercadoLibre #StockAnalysis #LatAmStocks #Fintech