MercadoLibre (MELI -0.39%), the largest e-commerce company in Latin America, is often compared to Amazon (AMZN 0.30%). However, the Argentine company (which is headquartered in Uruguay) is still a lot smaller than Amazon and growing at a much faster rate.

Could MercadoLibre, which is worth about $50 billion today, catch up to Amazon, which is worth nearly $1.3 trillion, by the end of the decade? Let's review its growth rates and catalysts to decide.

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How fast has MercadoLibre been growing?

Between 2016 and 2021, MercadoLibre's annual revenue rose from $844 million to $7.07 billion, representing a compound annual growth rate (or CAGR) of 53%. During that same period, Amazon's annual revenue increased at a CAGR of 27% from $136 billion to $470 billion.

MercadoLibre currently operates in 18 countries, but it generates most of its revenue in Brazil, Argentina, and Mexico. It established a first-mover advantage across the region by building sprawling logistics networks that reach areas that its smaller competitors couldn't effectively access.

It also locks in its shoppers with its Mercado Pago payments platform, which is now tethered to a growing ecosystem of other fintech services. That scale and stickiness have also prevented big overseas competitors like Amazon and Sea Limited's Shopee from gaining much ground.

Analysts expect MercadoLibre's revenue to rise 49% this year, grow 25% in 2023, and increase 26% to $16.6 billion in 2024. That deceleration accounts for the post-pandemic slowdown, inflationary headwinds, and other macro challenges. By comparison, analysts expect Amazon's revenue to increase 11% this year, 15% in 2023, and another 15% to $690 billion in 2024.

MercadoLibre doesn't own a higher-margin cloud infrastructure business like Amazon's AWS (Amazon Web Services), which traditionally offsets the lower margins of Amazon's retail business. Nevertheless, MercadoLibre's profitability could continue to improve as economies of scale kick in.

Analysts expect MercadoLibre's net income to grow from $83 million in 2021 to $1.03 billion in 2024, which represents a staggering CAGR of 132%. But that would still only equal a sliver of the $39.8 billion in net income that Amazon is forecast to generate in 2024.

What are the long-term catalysts for MercadoLibre?

Latin America's e-commerce penetration rate could double from about 8% today to 16% by 2025, according to data compiled by Fidelity, then climb to 50% over the "next few decades." By comparison, the U.S. and China already had e-commerce penetration rates of 20% and 27%, respectively, last year.

Meanwhile, Americas Market Intelligence also expects the e-commerce markets in Brazil, Argentina, and Mexico to grow at CAGRs of 22%, 32%, and 24%, respectively, from 2021 to 2024. Assuming that MercadoLibre continues to lead those three markets as e-commerce penetration rates rise across Latin America, it could easily match Wall Street's aforementioned growth estimates through 2024. 

Could it become larger than Amazon?

Assuming MercadoLibre generates $16.6 billion in revenue in 2024, then proceeds to grow at a more moderate CAGR of 20% through 2030, it could potentially generate about $50 billion in revenue by the final year. If it still trades at about five times sales, it could be worth around $250 billion -- which would represent an impressive five-bagger gain from its current price.

Yet MercadoLibre would still be a fraction the size of today's Amazon. As for Amazon, if it matches analysts' expectations and continues to grow at a CAGR of 10% from 2024 to 2030, it could generate a stunning $1.2 trillion in revenue in the final year. If it's still trading at about 2.5 times sales, it could be worth $3 trillion by 2030. That would represent a gain of about 130% from its current valuation.

Look beyond the market caps

I doubt MercadoLibre will come anywhere close to matching Amazon's market cap by the end of this decade. However, it could generate much more impressive gains than Amazon as investors start to fully appreciate the long-term growth potential of Latin America's nascent e-commerce sector.