MELI Stock In Spotlight: Michael Burry Says The Latin American Tech Giant 'Comes Cheap’ Despite Strong Growth

• Burry noted that the stock rose from 2022 to 2025, while its price-to-sales ratio remained flat.
• He emphasized that investors did not increase valuation multiples despite steady growth. 
• Last week, Goldman Sachs reduced its price target on MercadoLibre to $2,100 from $2,440.

Mercado Libre Inc. (MELI) stock drew attention after the “Big Short” fame investor, Michael Burry, highlighted the company’s sustained share-price rally with a largely unchanged price-to-sales multiple between 2022 and 2025. He believes that the stock may still be undervalued despite years of strong execution.

MELI’s Valuation vs Growth Divergence

In his Substack post, Burry showed a chart suggesting that, although the Latin American e-commerce company grew revenue strongly, its valuation remained low, pointing more to a changing investor mood than to weaker business performance.

In the post, Burry noted that the stock kept rising for several years even though its price-to-sales ratio did not change much, suggesting a gap between growth expectations and valuation. 

The chart breakdown pointed to a rare pattern: while the share price advanced meaningfully from 2022 through 2025, the price-to-sales ratio stayed unusually stable. That combination typically signals accelerating top-line performance. In this case, it also suggested investors were not aggressively re-rating the business despite consistent growth.

“Mercado Libre (MELI) is a clean long-term winner, and the stock comes cheap because it is not based in the United States and does not operate in the United States,” Burry said. 

Michael Burry said he added MELI to his portfolio at the mid-$1,500 range, describing it as a modest allocation.

Mercado Libre stock edged 0.06% lower overnight, ahead of Tuesday.  

MELI’s Q1 Performance 

Earlier this month, Mercado Libre delivered strong top-line growth, even as profitability came in slightly below expectations. For the fiscal first quarter, the company reported revenue of $8.85 billion, marking a 49% increase year over year. Earnings per share (EPS) came in at $8.23. 

While sales surpassed Wall Street’s forecast of $8.3 billion, EPS fell short of the expected $8.47, according to Fiscal AI data, reflecting margin pressure despite strong demand.

Analysts Cut Targets Despite Strong Q1

Following the Q1 earnings, a slew of Wall Street analysts revised their outlook, prompting discussions over its growth trajectory and margin pressure. Last week, Goldman Sachs reduced its price target on MercadoLibre to $2,100 from $2,440, while maintaining a ‘Buy’ rating, as per TheFly. 

UBS also cut its price target to $1,750 from $2,050, keeping a ‘Neutral’ stance. Meanwhile, JPMorgan adjusted its price target to $1,900 from $2,100 and held its ‘Neutral’ rating. 

MELI stock has declined by over 21% year-to-date. 

Also See: NKE, NCLH, GIS Stocks Hit 52-Week Lows Today: Why Are These Consumer Firms Crashing?

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