Latin American e-commerce and financial technology company MercadoLibre is the IBD Stock of the Day for Tuesday. The company's shares are flashing a positive "Blue Dot" signal for recent price strength as stocks scuffle overall.
Often called the Amazon of Latin America, MercadoLibre operates an e-commerce platform across 18 countries. Its largest markets are Brazil, Mexico and Argentina, where it was founded. MercadoLibre also offers Mercado Pago, a fintech business that includes a Venmo-like digital wallet popular in the region.
MercadoLibre's focus gives it less exposure to U.S. tariffs than its e-commerce peers, such as Amazon.com and Temu parent PDD Holdings.
On the stock market today, MercadoLibre stock was up more than 3% near 2,107 in recent action. Bloomberg reported earlier on Tuesday that MercadoLibre plans to add 28,000 workers in 2025, a 33% increase in its workforce.
Analysts at Benchmark initiated coverage of MercadoLibre stock with a buy rating. Benchmark analyst Fawne Jiang wrote that MercadoLibre "stands out as a dominant regional leader in the global e-commerce setting," according to a description published by financial news site TheFly.
MercadoLibre stock has gained 23% this year and 49% over the past 12 months. Its gains this year were helped by a strong fourth-quarter earnings report.
MercadoLibre Stock In Double-Bottom Base
MercadoLibre has formed a double-bottom base with a 2,202 entry, according MarketSurge pattern recognition. Shares also moved above MercadoLibre stock's 50-day moving average with a 2% gain on Monday.
Notably, MercadoLibre stock has a "Blue Dot" on its Relative Strength line, according to both its daily and weekly MarketSurge charts from Investor's Business Daily. Relative Strength measures a stock performance compared with the rest of the market. The RS Line Blue Dot shows strong outperformance vs. the benchmark S&P 500 index.
MercadoLibre's overall Relative Strength Rating is 92 out of a best-possible 99.
Meanwhile, MercadoLibre stock has an IBD Composite Rating of 97 out of 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating.
However, MercadoLibre stock has a 21-day average true range, or ATR, of 5.1%. The average true range is a metric available on IBD's MarketSurge that gauges the characteristic breadth of a stock's behavior. Stocks that tend to make large jumps or dives in daily action have a high ATR. Stocks that tend to make more incremental moves have lower ATRs. In the current unpredictable market, IBD suggests stocks with ATRs of 3% or below.
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Earnings Expectations For MercadoLibre
While MercadoLibre may have less direct exposure to U.S. tariff policy, analysts are debating how the business can perform if global trade slows.
Wedbush analyst Scott Devitt on Tuesday cut price targets for companies across his e-commerce coverage. He cited "ongoing macro concerns, potential tariff implications, and weaker consumer confidence levels both in the U.S. and internationally," as described in a client note Tuesday.
He lowered his price target for MercadoLibre stock to 2,400, down from 2,600 previously.
In MercadoLibre's home market of Argentina, President Javier Milei announced last week that he would lift most of the country's strict capital and currency controls next week after receiving a $20 billion loan from the International Monetary Fund.
However, Mexico has greater risk from U.S. tariffs and some economists are predicting a recession.
MercadoLibre is expected to report first quarter earnings early next month. Analysts project the company's sales will increase 26% year-over-year for the quarter to $5.5 billion, according to FactSet's consensus tally. Adjusted earnings are projected to increase 21% to $8.29 per share.
MercadoLibre stock gained following its fourth-quarter report in mid February. Adjusted earnings increased 286% to $12.61 per share while revenue increased 37% to $6.1 billion.
