Many investors lament missing out on Amazon. Few predicted it would evolve from an online bookseller into a retail behemoth. Nobody could have predicted that it would pioneer a cloud computing business.

The list of those with regrets includes Warren Buffett, who said he was "too dumb" to invest before buying shares in 2019. This shows that missed opportunities are also a problem for the most seasoned investors.

Fortunately for investors, Amazon is not the only e-commerce conglomerate, and others have emerged outside of North America. Given its successes, a second-chance e-commerce stock has emerged in Latin America with MercadoLibre (MELI 0.10%).

The rise of MercadoLibre

A Stanford student from Argentina named Marcos Galperin founded MercadoLibre in 1999 while still studying for his MBA. Galperin sought to build a platform for everyday shopping in his home region.

Admittedly, Latin America is a difficult place for conducting business. However, instead of hampering MercadoLibre, the challenges have made it a stronger business.

Since Latin America is primarily a cash-based society, Galperin began Mercado Pago to provide financial products to help cash-based customers shop online. Since many of these customers lack a bank account or credit card, these products quickly became popular, so popular that Mercado Pago expanded this service to those not shopping on MercadoLibre.

Likewise, the lack of reliable shipping options led to the creation of Mercado Envios. This segment helped businesses fulfill and ship orders. It also led to one- and two-day shipping in many areas, a previously unavailable service in Latin America.

The MercadoLibre investment case

Amid such growth, MercadoLibre launched its IPO in August 2007. Given that a $1,000 investment at that time is worth $61,000 today, investors might assume they have missed the boat on this stock.

Nonetheless, at a market cap of around $90 billion, it is less than 5% of Amazon's current size. While investors have no guarantee that the internet and direct marketing retail stock could achieve a $1.9 trillion market cap like Amazon has, MercadoLibre holds some potential to reach that point and perhaps exceed that point in time.

MercadoLibre's first market, Argentina, has become an example of how the company can succeed regardless of business conditions. Mercado Pago helped Argentinians cope with the country's massive inflation through investments in its Mercado Fondo investment accounts.

Moreover, now that inflation in Argentina is falling, MercadoLibre could benefit from increased sales activity, assuming the country's reforms help the country become wealthier.

MercadoLibre's financials

Additionally, a growing middle class in other Latin American markets has bolstered the company's financials. In the first quarter of 2024, revenue of $4.3 billion rose 36% versus the year-ago quarter. This occurred amid a 20% increase in gross merchandise volume and a 35% rise in total payment volume, which showed the continued success of MercadoLibre's two largest businesses.

Furthermore, the Q1 net income of $344 million surged 71% higher over the last year.

While the company did not offer forward guidance, consensus estimates forecast a 33% increase in revenue and a 77% surge in net income. Thus, its improvements are not a one-time phenomenon, and given MercadoLibre's resilience, its growth is likely to continue for some time to come.

Admittedly, at a price-to-earnings (P/E) ratio of about 78, it is a pricier stock than Amazon, which trades at 52 times earnings. Still, investors should remember that Amazon grew its revenue by only 13% in the most recent quarter. Thus, by paying a 50% higher valuation, MercadoLibre investors receive nearly triple the revenue growth, a factor that could justify such a premium.

MercadoLibre as a second-chance stock

Given its smaller size and ability to prosper in volatile emerging markets, MercadoLibre looks like a viable second-chance stock to Amazon.

MercadoLibre has emerged as the leading e-commerce and fintech company in the volatile but fast-growing Latin America region. The company has helped Latin Americans address challenges such as shopping online without credit cards and shipping items faster.

Moreover, as its customers became wealthier, online shopping has increased, meaning the company has positioned itself to prosper under a variety of conditions. Considering that MercadoLibre has plenty of room to grow, it could serve as a second-chance stock for those wanting to drive returns in the e-commerce business.