MercadoLibre Quarterly Revenue Just Topped $10 Billion for the First Time. Is the Post-Earnings Sell-Off a Gift for Long-Term Investors?

• This is MercadoLibre's headiest top-line leap for immoderate 4th successful 4 years.

• It has delivered 30 consecutive quarters of astatine slightest 30% year-over-year gains.

• With gross maturation accelerating for the 2nd consecutive year, this is practically a fastener to go the eighth consecutive twelvemonth of astatine slightest 37% yearly top-line growth.

Unfortunately for MercadoLibre and its investors, the marketplace ever dives beneath the aboveground earlier declaring that the h2o is fine. Bottom-line results, portion amended than expected, were rough. The banal responded by sliding arsenic overmuch arsenic 8% connected Thursday earlier settling for a 5% diminution by the close.

Lost successful translation

Zoom retired a small bit, and the market's effect to the mixed fiscal results doesn't look truthful bad. MercadoLibre banal was a small little a period agone and a batch little 2 months ago. However, zoom retired immoderate more, and MercadoLibre is simply a marketplace laggard that has declined by much than 20% implicit the past year.

This is wherever investors tin spot the stock's weakness arsenic a buying opportunity, arsenic agelong arsenic they afloat recognize wherefore the Latin American bellwether has failed to support gait with the broader market's ascent. MercadoLibre's maturation is impressive, but it's virtually paying for that velocity connected the bottommost line.

MercadoLibre's namesake e-commerce concern continues to station steadfast top-line growth. Its Mercado Pago outgo level is besides showing nary signs of slowing. However, the propulsion to grow its recognition paper and indebtedness offerings has accrued its recognition portfolio by 75% implicit the past year. This whitethorn beryllium to beryllium a astute determination successful the agelong run, but successful the abbreviated run, it increases the company's recognition hazard and results successful a near-term spike successful nonaccomplishment provisions.

This isn't the lone happening weighing connected the bottommost line. Brazil remains competitory connected the e-commerce front, with overseas players offering cutthroat promotions and debased minimums to suffice for escaped shipping. MercadoLibre has decided to play on truthful it doesn't cede its ascendant marketplace position. This is different lawsuit of short-term symptom for semipermanent gain.