I just Bought $5,000 More of This Stock

Daniel Pronk•Aug 6, 2026

Summary

Daniel provides a comprehensive analysis of Mercado Libre's performance, emphasizing that achieving 50% revenue growth at such a massive scale is unprecedented. Daniel notes that the current margin compression is a deliberate, disciplined strategy to reinvest in high-growth areas such as the credit portfolio, which grew 75% year-over-year, and the advertising business. Daniel highlights the 'flywheel effect' of the ecosystem, where users engaging with both commerce and fintech platforms become significantly more profitable over time, with such 'ecosic' users growing by 37%.

Daniel addresses market concerns regarding non-performing loans (NPLs) by pointing out that the 15-to-90-day delinquency rates are near record lows. Daniel further explains that while over-90-day loans ticked up slightly, Daniel is not concerned because Mercado Libre maintains a conservative 143% provision coverage. Daniel calculates an 'owner's free cash flow' of $7.45 billion, suggesting the stock trades at a very low multiple relative to its true cash-generating potential if growth investments were paused.

Regarding the mentioned stock:

MELI: Daniel views Mercado Libre as one of the most undervalued stocks in the market, citing its consistent 30% growth for over 30 consecutive quarters. Daniel believes the company could reach a fair value of $3,700 and a future price target of $5,000 per share by 2029 if it achieves an annual EBIT growth of 40%. Daniel emphasizes that the Brazilian market, the company's largest, is showing accelerated revenue growth of 50%, which Daniel interprets as a sign that the business moat is deepening despite its size.

Mentioned Stocks

MELI

Sentiment: BUYAction: BOUGHT

Reasoning: Daniel explains that Mercado Libre is growing 50% year-over-year while maintaining profitability, a combination Daniel finds unique in the current market. Daniel notes that while the market is worried about short-term margins, Daniel believes the long-term profit potential is massive as the company harvests its current aggressive investments. Daniel estimates a 2029 price target of $5,000 per share based on projected revenue of $82 billion and a return to 12-15% operating margins. Daniel also highlights that Brazil, the largest market, grew 50% in the quarter, proving the business is still accelerating. Daniel personally bought more shares following the post-earnings dip.

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