Earlier this year, MercadoLibre (NASDAQ:MELI) was flying high. The Latin American e-commerce and payments specialist has been on a multiyear sprint, with its stock price tripling over the past three years and gaining more than 1,300% over the past decade. The company has been riding the consumer migration to online sales and digital payments, becoming the platform of choice for many.

MercadoLibre shares had more than doubled in 2019, but the recent rally was cut short when geopolitical concerns reared their ugly head. The results of Argentine elections pressured stocks in the region, stoking investor fears that the political uncertainty would stunt MercadoLibre's growth.

The company is scheduled to report the results of its third quarter after the market closes on Thursday, Oct. 31. Let's review three areas that investors will be watching closely when MercadoLibre reports.

A smartphone with a shopping cart icon

Image source: Getty Images.

Revenue growth

In the second quarter, MercadoLibre reported revenue of $545 million, up 63% year over year and accelerating from the 48% growth in Q1. This was the company's fastest growth rate in over two years. The results were even more stunning in local currencies, soaring more than 102% year over year. 

MercadoLibre doesn't issue quarterly guidance, but analysts' consensus estimates for the third quarter are calling for revenue of $604.89 million, which would represent growth of 70% year over year. 

Continuing profits

MercadoLibre has taken a number of preemptive steps in recent years to strengthen its position in advance of an aggressive move by Amazon.com into the region. One of the key strategies was to offer free or low-cost shipping on many items, a move that has weighed on MercadoLibre's bottom line.

The company returned to profitability in recent quarters. In Q2, MercadoLibre reported net income of $16.2 million, reversing a year-ago loss of $11.2 million. This generated earnings per share (EPS) of $0.31, topping analysts' expectations of $0.25 and reversing a per-share loss of $0.25 in the prior-year quarter.

Investors expect those profits to continue. Analysts' consensus estimates are pegged at EPS of $0.01, which would be an improvement from a $0.23-per-share loss in the year-earlier period.

Payments

A move that was originally made to solve a customer pain point has become MercadoLibre's biggest business. MercadoPago, the company's payment solution, generated more than $6.5 billion in total payment volume in the second quarter, up 47% year over year in U.S. dollars and up 90% in local currencies. The number of payment transactions also soared, growing 112% to more than 181 million transactions.

MercadoLibre has taken this show on the road, offering the service to a growing number of e-commerce platforms and brick-and-mortar sellers. The company recently achieved an important milestone, as its off-platform payments exceeded the total amount transacted on its platform.

Investors will be watching closely for continued strong payments growth.

A graphic showing a variety of consumer electronics, household items, sporting goods, and furniture.

Image source: MercadoLibre.

The long view

Recent events in Argentina have given investors pause, so it's important to put these affairs into context. Since it launched more than two decades ago, MercadoLibre has dealt with political scandals, hyperinflation, recession, currency devaluation, and a laundry list of other problems in its host countries.

Since going public in late 2007 -- and despite the geopolitical and economic issues the company has faced in Latin America -- the tech giant's stock has surged about 1,790%, steamrolling the 100% gains of the S&P 500. This reinforces the point that regardless of whether shares move up or down on following the earnings report, MercadoLibre investors who take the long view will continue to be rewarded.