The Ultimate Growth Stock to Buy With $1,000 Right Now

Key Points

• MercadoLibre's stock crushed the market over the past decade.

• It still hasn't saturated the Latin American market.

• Rising internet-penetration rates and income levels will drive its stock even higher.

• 10 stocks we like better than MercadoLibre ›

MercadoLibre (NASDAQ: MELI) has been a great growth stock for long-term investors. Over the past 10 years, its stock soared about 2,060% as the Nasdaq rose less than 370%. That rally was fueled by the explosive growth of its e-commerce and fintech platforms.

Investors might be reluctant to buy MercadoLibre's stock after that massive rally, but it's still an incredible growth stock that could turn a modest $1,000 investment into tens of thousands of dollars. That might seem impossible because it's trading at nearly $2,400, but most brokerages will allow you to purchase a fractional share for less than $1,000.

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Why did MercadoLibre crush the market over the past decade?

MercadoLibre was founded in Argentina in 1999 and subsequently grew into the largest e-commerce company in Latin America, with localized marketplaces across 19 countries. It generates most of its revenue in Brazil, Argentina, and Mexico, but is gradually expanding into smaller markets like Chile, Colombia, Peru, and Ecuador. The company moved its headquarters from Argentina to Uruguay in 2021 and reports earnings in U.S. dollars.

Image source: Getty Images.

Like Amazon, MercadoLibre operates both first-party and third-party marketplaces. It established a first-mover advantage in Latin America's nascent e-commerce market by expanding its Mercado Envios logistics networks across challenging terrain and underdeveloped infrastructure. This locked its shoppers into its Mercado Pago digital-payments platform, providing cash-on-delivery options for the region's unbanked shoppers and localizing its platform for each country.

Those investments prevented its regional and overseas challengers from gaining much ground, and the company's annual revenue surged at a compound annual growth rate (CAGR) of 44%, from $557 million in 2014 to $20.78 billion in 2024. It stayed firmly profitable over the past four years as it sold more products from its higher-margin third-party marketplace, expanded its higher-margin advertising business, and leveraged its scale to dilute its logistics and payment processing costs. It's also using more artificial intelligence (AI) tools to improve its product recommendations, integrated ads, and logistics services.

At the end of 2024, MercadoLibre served more than 100 million annual unique active buyers across its marketplaces and 60 million monthly active users across its fintech ecosystem, which include:

• Mercado Pago
• Mercado Crédito
• Digital wallets, point of sale (PoS) payment services
• Crypto trading platform
• Buy now, pay later (BNPL) tools
• Insurance products

Why is MercadoLibre still a great long-term investment?

MercadoLibre is the clear e-commerce and fintech leader in Latin America, but its market cap of $123 billion is still tiny, compared to Amazon's $2.48 trillion valuation. It's also less valuable than China's Alibaba, which is valued at $322 billion.

MercadoLibre still has lots of upside potential because it only serves a fraction of the 668 million people (including 451 million adults) who reside in the Latin American and Caribbean regions. It should have plenty of room to expand its e-commerce and fintech ecosystems as the region's internet-penetration rates and income levels improve.

According to Grand View Research, Latin America's e-commerce market could grow at a CAGR of 16.7% from 2024 to 2030. IMARC Group expects the region's fintech market to expand at a CAGR of 15.9% from 2025 to 2033. From 2024 to 2027, analysts expect MercadoLibre's revenue and earnings per share (EPS) to grow at a CAGR of 28% and 34%, respectively, even as inflation, currency devaluation headwinds, and political turmoil impact some of its key markets.

MercadoLibre's stock might not seem like a bargain at 36 times next year's earnings, but it's only slightly pricier than Amazon, which is growing slower but trades at 31 times next year's earnings. Alibaba, which is also growing slower than MercadoLibre and faces tougher macro, competitive, and regulatory challenges in China, trades at just 15 times next year's earnings.

MercadoLibre's stock might stay volatile as investors fret over its near-term macro challenges, but it should head higher once those headwinds subside. If you're looking for a great growth stock that resembles an earlier version of Amazon, this Latin American bellwether checks all the right boxes.

Should you invest $1,000 in MercadoLibre right now?

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Leo Sun has positions in Amazon and MercadoLibre. The Motley Fool has positions in and recommends Amazon and MercadoLibre. The Motley Fool recommends Alibaba Group. The Motley Fool has a disclosure policy.