Don't Let the Volatility Fool You -- Here Are 2 Reasons to Buy MercadoLibre Now

MercadoLibre (NASDAQ: MELI) is a dominant e-commerce and fintech platform that just keeps growing. It entered 2026 with year-over-year revenue growth of more than 40%. It's delivered growth like this for years, and it still has plenty of runway left. Yet the stock is trading about 30% off its highs and trades at its lowest price-to-sales multiple in more than a decade.

For investors seeking opportunities beyond artificial intelligence (AI), this could be one of the best bargains on the market. Here are two of the best reasons to buy the stock now.

Image source: The Motley Fool.

1. Consistent growth

The more MercadoLibre invests in its ecosystem of services, the more it grows. It's heading into 2026 with momentum, and that's clear in the results. Every major business line -- shipping, advertising, e-commerce, and credit products -- is growing rapidly. These services are appealing to a growing portion of the population across Latin America. Unique active buyers on its marketplace rose 24% year over year to 83 million.

That growth also reflects a huge opportunity to serve millions of people who still lack basic banking services. Since the company has leaned more heavily into fintech, assets under management have surged from $2 billion to nearly $19 billion over the last three years. The number of fintech users increased 27% year over year to almost 78 million in the fourth quarter of 2025.

2. A widening competitive moat

Another strength is MercadoLibre's leadership. Management is focused on strengthening its competitive advantage, or moat, that can create long-term value for shareholders. That long-term focus also helps explain why the stock is down.

The company is spending aggressively to expand the business, which is pressuring margins in the near term. Profit margin peaked above 9% about a year ago and has since slipped to under 7%.

But that's by design. Management is investing in free shipping, automation, expanding its credit card business, and growing inventory and cross-border trade. These are moat-building moves that deepen loyalty and expand the customer base. As CFO Martin de los Santos said, "We believe these investments are creating a foundation for future growth."

Profit margin has been trending higher over the past three years after climbing out of negative territory. The recent 9% margin likely won't be the peak. In the fourth-quarter earnings report, the company stated, "We are confident that as all of these initiatives scale, their profitability will mature while reinforcing our competitive advantages and deepening our relationships with users across the platform."

For patient investors, holding shares in a company focused on long-term growth rather than short-term results is one of the most important qualities to look for in any investment. Overall, MercadoLibre's competitive lead and moat-building investments will make it an excellent long-term compounder for your money.

John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends MercadoLibre. The Motley Fool has a disclosure policy.