Think It's Too Late to Buy MercadoLibre Stock? Here's the Biggest Reason Why There's Still Time.

Looking at the history of MercadoLibre (NASDAQ: MELI) stock, one might feel it is too late to buy. Since the company launched its initial public offering in 2007 at $18 per share, the stock has risen more than 110-fold. Also, considering it is an international stock operating in the volatile Latin American market, potential investors might feel skittish about its P/E ratio of 53.

Still, such investors could easily make the mistake of writing off MercadoLibre too early. Here's why it may still have considerable room to run despite its massive growth.

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Making sense of MercadoLibre stock

MercadoLibre operates in 18 Latin American countries. Most of its revenue comes from providing e-commerce, fintech, and logistics services through its various businesses. These enterprises will either work separately or together to serve its customers.

More importantly, MercadoLibre has thrived because of regional challenges. When cash-based customers could not buy on its e-commerce site, it launched Mercado Pago to provide fintech services. Also, struggles with shipping and fulfillment led it to create Mercado Envios to help its customer base and, later, the public in general fill orders and ship goods.

Those businesses have thrived, delivering 37% revenue growth in 2024. With that growth, net income totaled $1.9 billion, a 94% yearly increase. Although growth may slow, analysts forecast a 25% revenue increase in 2025 and 23% the following year. Those increases should help it justify a forward P/E ratio of just 42.

Finally, its market capitalization is only about $100 billion, a small fraction of the $2.1 trillion market cap for the U.S.' e-commerce leader, Amazon. As MercadoLibre continues to grow its business and improve the lives of Latin Americans, its stock can likely earn considerable returns for years to come.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Will Healy has positions in MercadoLibre. The Motley Fool has positions in and recommends Amazon and MercadoLibre. The Motley Fool has a disclosure policy.