Several of the world’s leading companies have made millions over the past few decades. For example, an investment of $30,000 in AmazonThe 1997 IPO would have grown to $92 million today. The same amount in ShopifyThe 2015 IPO would have been about $1.3 million.
Amazon and Shopify are still strong long-term players in terms of global growth e-commerce marketbut it may be difficult to replicate our findings in the next decade. So if you are looking for some multibagger with the most people in e-commerce, you should check it out MercadoLibre(NASDAQ: MELI)the leader of the growing market in Latin America.
Image source: Getty Images.
MercadoLibre was founded in 1999, and established the first opportunity in Latin America for the nascent and decentralized e-commerce market by building a reliable network available in the region. It now serves its market in 18 countries, but makes the most money in Brazil, Mexico, and Argentina.
MercadoLibre leveraged this growth by locking its customers into the Mercado Pago digital payment system. This platform became the foundation of the fintech ecosystem, which offers additional credit cards, loans, and cryptocurrency trading. The persistence of this environment increased the company’s strength compared to its competitors in the region and abroad.
From 2013 to 2023, MercadoLibre increased its sales (GMV) at a compound annual growth rate (CAGR) of 20%, its total payment volume (TPV) at a CAGR of 54%, and its total revenue at a CAGR of 41. % in USD terms. The number of annual unique buyers has quadrupled, from 20.2 million to nearly 85 million.
This growth was driven by the rise in investment and the rise of the internet in Latin America, which fueled the growth of e-commerce and fintech platforms. This change was further exacerbated during the COVID-19 pandemic. But according to Grand View Research, the Latin American e-commerce market could continue to grow at a CAGR of 14.6% from 2024 to 2030 as most buyers come from brick-and-mortar retailers.
MercadoLibre also recently applied for a banking license in Mexico, indicating that it has serious interest Now Holdings in the online market “neobanking” only. About 70% of Latin Americans are still unbanked, according to the World Bank, making it a fertile market for new digital banking services. This is why Grand View Research expects the Latin American neobanking market to grow at a CAGR of 54.8% from 2023 to 2030.
Meanwhile, MercadoLibre’s shares rose as the economy cut back on spending and spending. This is why it became profitable in 2021 and grew its total revenue at a CAGR of 244% over the next two years.
MercadoLibre served 87 million active consumers and 56 million fintech users per month in the first nine months of 2024. But the company still has a lot of room to grow before it reaches Latin America’s population of more than 660 million.
Currently, analysts expect MercadoLibre’s revenue and total revenue to grow at a CAGR of 29% and 48%, respectively, from 2023 to 2026. Its stock still looks very valuable compared to the estimated 41 times its earnings next year.
Let’s assume that MercadoLibre matches Wall Street’s expectations, continues to grow its EPS at a solid CAGR of 25% over the next eight years, and still trades around 40% by the end of the year. If it checks all these boxes, the company’s value could rise from $1,900 today to $15,200 in the next 10 years. The gain of these eight wallets would increase its market value from $96 billion to about $768 billion – but this would make it smaller than Amazon, which is already worth $2.4 trillion today.
MercadoLibre’s business may be affected by inflation, politics, and regulation in Latin America over the next decade. But the company has faced many challenges in the past, and I believe it can continue to grow in the future. Investors buying MercadoLibre stock today are bucking the buzz that’s about to turn into a big long-term gain.
Do you feel like you’ve missed the boat on buying high-performing stocks? Then you will want to hear this.
In some cases, our professional team of experts provides a “Double Down” stock advice for companies who think they are about to break out. If you’re worried that you’ve already missed your chance to make money, now is the best time to buy before it’s too late. And the numbers speak for themselves:
Nvidia:if you invested $1,000 when we doubled in 2009,you will have $348,112!*
Apple: if you invested $1,000 when we doubled in 2008, you will have $46,992!*
Netflix: If you invested $1,000 when we went public in 2004, you would have $495,539!*
Right now, we’re offering “Double Down” deals for three amazing companies, and there may not be another opportunity like this anytime soon.
John Mackey, former CEO of Whole Foods Market, an Amazon company, is a member of the board of directors of The Motley Fool. Leo Sun he has positions at Amazon and MercadoLibre. The Motley Fool owns and recommends Amazon, MercadoLibre, and Shopify. The Motley Fool recommends Nu Holdings. The Motley Fool has disclosure process.
