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Wide-moat MercadoLibre continued to benefit from the effects of the pandemic and its investments in product and technology in 2020’s fourth quarter as its revenue growth (in USD) of 97% beat our 80% forecast. We expect to lift our per share fair value estimate on MercadoLibre of $1,300 by a high-single-digit percentage given its improving prospects but view its shares as fully valued.
Founded in 1999, MercadoLibre's commerce segment (representing around 52% of net revenue in 2019) includes online marketplaces in more than a dozen Latin American countries, display and paid search advertising capabilities (MercadoClics), online store management services (MercadoShops), and third-party logistics solutions (MercadoEnvios). Its fintech segment includes an online/offline payment-processing platform (MercadoPago), mobile wallet platform, credit solutions for buyers/sellers, and asset management offerings (Mercado Fondo). The company derives more than 95% of its revenue from Brazil, Argentina, and Mexico.
