Unless you're retired and need to invest very conservatively, most investors want to have at least a few top growth stocks in their portfolios. There are no guarantees in the market, which is why diversification is so important. However, there are a few rare stocks that look like no-brainers. They're demonstrating incredible growth, are already profitable, and have strong growth drivers.
MercadoLibre (MELI 0.10%) fits that framework, and there are several reasons the investing thesis looks so compelling right now.
Trends are in its favor
Global e-commerce keeps growing as a percentage of global retail sales, but it's not the same everywhere. Consider the countries with the fastest e-commerce growth.
Image source: Statista.
Three out of the top five countries with the fastest-growing e-commerce sales rates are in Latin America. Not only that, but these are MercadoLibre's three top regions, Mexico, Argentina, and Brazil, and they're all well-ahead of global rates.
Argentina, which has historically been MercadoLibre's primary growth market, saw negative year-over-year revenue growth in the 2024 first quarter due to high inflation. But gross merchandise volume (GMV) increased 43% year over year in Mexico and 36% in Brazil, outpacing the 2023 rates for these countries.
MercadoLibre continues to demonstrate outstanding growth, both in e-commerce and in its newer fintech business. Total GMV increased 20% year over year in the first quarter, or 71% currency neutral, with a 25% increase in items sold.
It operates in countries that are still getting started in e-commerce and digital services in general. That's why its fintech segment, which started as a way for shoppers who didn't have credit cards to pay for purchases, is growing by leaps and bounds. Total payment volume increased 35%, or 86% currency-neutral in the first quarter.
The part that most concerns investors is that there's still so much more to expect as these countries continue to embrace and adopt e-commerce and digital payments. MercadoLibre is well-positioned to keep up its strong growth and create shareholder value.
