Rising 30% so far in 2025 and now a $120 billion company, Latin American e-commerce and fintech juggernaut MercadoLibre (MELI 3.34%) may have investors feeling like they missed their opportunity to buy.
However, despite the company's immense size, one key attribute makes it worthy of buying today: its growth optionality.
MercadoLibre's seemingly endless ways to grow
Growth optionality, or a company's flexibility to expand into new markets, is one of the most powerful forces for a stock. And MercadoLibre has growth optionality in spades.
Image source: Getty Images.
Expanding to all of Latin America
MercadoLibre is home to 71 million monthly active buyers who purchased over $15 billion worth of products in the last quarter. Yet Brazil, Argentina, and Mexico account for 96% of the company's total sales, leaving a long growth runway as it expands into new countries.
As a whole, Latin America has 50% more people than the United States. Still, the region's e-commerce penetration rate is only half that of its neighbor to the north, highlighting the vast opportunity that remains.
Advertising
The company grew its share of the Latin American digital ads market from 1.5% in 2019 to 6.7% in 2024. This market share makes it the third-largest advertiser in the area.
This burgeoning segment grew sales by 38% in the second quarter. With the Latin American retail media market expected to triple in size between 2024 and 2028, MercadoLibre's rapid growth here should persist.
Business-to-business (B2B)
MercadoLibre recently launched its B2B offering, with 4 million users enabled to make wholesale purchases.
Management estimates this market is roughly four times the size of the company's existing consumer marketplace. Any success here could be a major multiplier over time.
Fintech and credit
Home to 68 million monthly active fintech users, MercadoLibre is well positioned to disrupt the largely underbanked and cash-payment-heavy nature of most Latin American countries.
Furthermore, the company now has 35 million users in its credit portfolio -- 60% of whom had no credit offers before.
Still growing sales by more than 30% quarter after quarter, MercadoLibre's growth story is far from over.
