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MercadoLibre (MELI): analysis traps
Where its figures could mislead a reader, and what to check before taking them at face value · Data: Q3 2026, to Sep 30, 2026, filed Nov 5, 2026; rules v1.1
MercadoLibre (MELI): 0 rules of 10 triggered on the filings to Sep 30, 2026. 1 to review; 2 with insufficient data; 2 not applicable. Each is a question to verify, with the normal explanation that would produce the same figures.
Check these first
A precise DCF value = the true value To review · confidence high
The DCF's point value is 1,133.03 a share (price 1,530.30); 87% of it is the terminal value, a number about years no one has seen. Moving operating margin by ±3 pts alone takes it from 552.66 to 1,713.40; across every method the research ran the range is 0 to 14,557. The value is a range; the decimals are not information.
Innocent reading: A stable, mature business with a narrow range of outcomes, where the point value is a fair summary.
Every rule
A01 FCF growth = the business improved Not triggered confidence medium
Free cash flow rose $3.7B to $10.8B; working capital and lower capex explain 23% of it, so most of the gain is in operating cash flow itself.
The figures and how they are read
| Fiscal year before | FY2024 |
| Fiscal year | FY2025 |
| Operating cash flow, year before | $7.9B |
| Operating cash flow | $12.1B |
| Capex, year before | $860M |
| Capex | $1.3B |
| Free cash flow, year before | $7.1B |
| Free cash flow | $10.8B |
| Change in FCF | $3.7B |
| Change in capex | $483M |
| Working capital: change in its cash contribution | $836M |
| Of which: capex cut | 0.00 |
| Of which: working capital released | $836M |
| Share of the increase that need not repeat | +22.5% |
| Operating cash flow before working capital: change | 3362000000.00 |
FCF = operating cash flow − cash capex; ΔFCF = ΔOCF − ΔCapEx; the working-capital part is the change in the cash-bridge items (receivables, inventory, payables, accruals), with the sign of the cash flow statement
Source: FY2025 (cash flow statement, fiscal year) · FY2024 (cash flow statement, fiscal year before)
A07 Stock compensation added back = no economic cost Insufficient data
fewer than two fiscal years of stock compensation and share counts on file
B02 Receivables growing = future cash is certain Not triggered confidence medium
Receivables grew 47% against revenue 45% in Q3 2026; DSO 4 against a median of 4: collections are keeping pace with sales.
The figures and how they are read
| Quarter | Q3 2026 |
| Revenue, year over year | +45.1% |
| Receivables, year over year | +47.3% |
| Quarter before | Q2 2026 |
| Revenue y/y, quarter before | +49.8% |
| Receivables y/y, quarter before | +33.6% |
| Days sales outstanding | 3.7 |
| DSO, median of eight quarters | 3.8 |
| Receivables | $439M |
| Revenue | $10.8B |
receivables and revenue against the same quarter a year earlier; DSO = receivables / quarterly revenue × days, against the median of the eight quarters before
Source: Q3 2026 (receivables and revenue) · Q3 2025 (the same quarter a year earlier)
B08 Adjusted profit = economic profit Insufficient data
no reconciliation table read from the releases yet and fewer than three quarters with both an adjusted and a GAAP EPS
C02 Low net debt = no refinancing risk Not triggered confidence medium
$6.9B comes due within a year, 2.8× covered by cash and investments of $7.4B plus $12.3B of free cash flow.
The figures and how they are read
| Cash and investments | $7.4B |
| Debt | $13.2B |
| Net debt | $5.8B |
| Due within a year | $6.9B |
| Read from | the current portion of debt on the balance sheet |
| Free cash flow, twelve months | $12.3B |
| Cash plus free cash flow | $19.6B |
| Coverage of what is due | 2.8 |
| Due in the second year | — |
| Balance sheet date | 2026-09-30 |
due within a year from the maturity table (else the current portion of debt), against cash and investments plus free cash flow over the last twelve months (zero if negative); no credit lines assumed
Source: 2026-09-30 (debt maturities, cash and investments)
D03 EPS growth = profit growth Not triggered confidence high
EPS rose 6% and net income rose 6% in Q3 2026; the share count fell 0.0%: EPS growth follows profit growth.
The figures and how they are read
| Quarter | Q3 2026 |
| Quarter before | Q3 2025 |
| EPS, year before | $8.30 |
| EPS | $8.84 |
| Net income, year before | $421M |
| Net income | $448M |
| Diluted shares, year before | 50.7M shares |
| Diluted shares | 50.7M shares |
| EPS growth | +6.4% |
| Net income growth | +6.4% |
| Diluted shares: change | 0.0% |
| eps from profit | $0.53 |
| eps from share count | $0.00 |
EPS and net income against the same quarter a year earlier; the EPS bridge attributes the change to profit first, then to the share count (the order is fixed and disclosed)
Source: Q3 2026 (net income, diluted shares, EPS) · Q3 2025 (the same quarter a year earlier)
E02 Low P/E at a cyclical peak = undervalued Not triggered confidence medium
Net income of $1.9B is a high, but the last eight years rose almost every year (median $482M): a steady climb, not a cycle's top, so the P/E of 41.0× is not on peak profit in that sense.
The figures and how they are read
| market value | $77.6B |
| net income ttm | $1.9B |
| pe ttm | 41.00 |
| net income median fy | $482M |
| pe mid cycle | 161.00 |
| net income peak fy | $2.0B |
| years | FY2018 / -37.0; FY2019 / -172.0; FY2020 / -1.0; FY2021 / 83.0; FY2022 / 482.0; FY2023 / 987.0; FY2024 / 1911.0; FY2025 / 1997.0 |
| down years in window | 1 |
P/E on the trailing twelve months' net income against the P/E on the median net income of the last eight fiscal years (a mid-cycle stand-in); 'at a peak' = this year's profit at or above 90% of the best year and at least 1.3× the median
Source: Q3 2026 (net income, trailing twelve months)
E07 A precise DCF value = the true value To review confidence high
The DCF's point value is 1,133.03 a share (price 1,530.30); 87% of it is the terminal value, a number about years no one has seen. Moving operating margin by ±3 pts alone takes it from 552.66 to 1,713.40; across every method the research ran the range is 0 to 14,557. The value is a range; the decimals are not information.
The figures and how they are read
| dcf value | 1,133.03 |
| price | 1,530.30 |
| terminal value share | +86.7% |
| swing by input | Operating margin / ±3 pts / 552.66 / 1713.4; WACC / ±1 pt / 940.12 / 1398.45; Revenue growth (each year) / ±5 pts / 929.11 / 1371.03; Working capital per $ of growth / ±10 pts / 1013.33 / 1252.73 |
| range all methods | 0.25; 14556.9 |
the DCF's point value against the share of it that is the terminal value and the value at each input moved by one step (growth ±5 pts, WACC ±1 pt, margin ±3 pts …); the range across every method the research ran
Source: 2026-11-08 (valuation research)
What would explain it innocently
- A stable, mature business with a narrow range of outcomes, where the point value is a fair summary
- The inputs that matter most are themselves well known (a regulated return, a long contract)
What to look for in the filing
- Which input you believe differs from the research's and why
- What the price implies for growth (the reverse DCF on the fair-value page)
What would show the trap does not apply
- The DCF's value is robust to the terminal growth and discount rate (the range's low end is still above the price)
- The company's cash flows over the next three years track the DCF's early years
Look again: next filing.
J06 A bank's low P/E and high profit = safe Not applicable
not a bank
J08 A REIT's low net income = the dividend is unsafe Not applicable
not a REIT
What the statuses mean
Triggered: the filings show the pattern; read the normal explanations and the missing evidence before concluding anything. To review: one quarter or a weak signal; a reader's judgement, not a pattern. Not triggered: the pattern is absent on these figures. Insufficient data: the filings read so far do not hold what the rule needs; this is not a clean bill. Not applicable: the rule is not meant for this kind of company (a bank's working capital, a loss-making quarter's EPS growth). Out of date: the latest filing is more than fifteen months old.
Severity is what the pattern could mean for cash, value or solvency; confidence is how reliable the inputs and the reading are. The two are kept apart.
Record a view
A reader's judgement, grounds, what would change it and the next review; kept in the browser (needs JavaScript).
Every rule and the companies it triggers on → MercadoLibre: cash flow → Earnings quality score →
Each rule reads the company's own filings by a fixed formula and says what would explain the same figures innocently. A triggered rule is a question to verify, not a finding of manipulation, and not a view on the stock. Missing data is shown as missing, never as clear. Not investment advice.