Mercado Libre's quarterly earnings were disappointing, leading to over a 5% decline in its stock price in after-market trading despite record sales.
In a recently released financial report, Mercado Libre announced that, while it achieved a record sales total of approximately $8.8 billion in 2025, its earnings per share fell below investor expectations. This news caused the company's stock, publicly known as MELI, to drop more than 5% during after-market trading. Investor sentiment had already been cautious due to a broader downturn impacting technology companies on Wall Street in recent weeks.
Mercado Libre attributed this decline in earnings per share — which decreased nearly 12% — to a normalization in its tax rate following an unusually low level in the fourth quarter of 2024. Despite the company's net revenue exceeding prior expectations, analysts expressed concern about the reduced earnings, prompting a reevaluation of the company’s financial health and short-term growth prospects. This reaction underscores the nuanced relationship between revenue growth and profitability in the eyes of investors.
The market's response reflects a broader apprehension regarding the tech sector, where similar trends have been witnessed across various companies experiencing earnings adjustments. The implications of this financial performance for Mercado Libre can lead to heightened scrutiny from analysts and investors, potentially influencing future investment strategies and competitive positioning within the burgeoning e-commerce market in Latin America.
