MercadoLibre (MELI +4.66%) stock gained 3% through 1:40 p.m. ET Thursday after investors received some positive news on the Amazon.com (AMZN +1.25%)-lookalike's market position.
This morning, ResearchAndMarkets.com (RAM) published a report confirming that "MercadoLibre maintains a leading position" in the Chilean e-commerce market.
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Details, please
The business-to-consumer (B2C) e-commerce market in Chile hit $12.6 billion in 2025 and is expected to grow 7.6% annually through 2026, reaching $16.9 billion, says RAM. With two-thirds of Chileans shopping online in 2024 (when B2C spending was only $8.7 billion), "high internet and banking penetration" has already driven Chilean e-commerce spending up past the levels last seen during the pandemic.
MercadoLibre and rival Falabella, a publicly traded Chilean stock, dominate the e-commerce market in Chile. Falabella is growing rapidly both in Chile and abroad, but MercadoLibre remains the leader, despite being a foreign-owned company from Chile's perspective.
NASDAQ: MELI
Key Data Points
Is MercadoLibre stock a buy?
Valued at $104 billion, MercadoLibre stock trades at a seemingly expensive 50 times trailing earnings. It costs barely 12 times free cash flow, however, which seems a bargain price relative to the stock's 33% projected long-term growth rate.
With a $18 billion market cap, Falabella is just one-fifth MercadoLibre in size. It costs only 17 times earnings and 15 times free cash flow. While seemingly cheaper on a P/E basis, therefore, its valuation is similar to MercadoLibre's on a P/FCF basis.
If you can find a way to invest in Falabella -- which doesn't appear to be listed in the U.S., even as an OTC trade -- the stock looks intriguing and is early in its growth cycle. In the meantime, MercadoLibre stock looks to me like the best and easiest way to invest in growth in the Latin American e-commerce market.
