MELIMercadoLibre, Inc.
Is the business good?
The checks split: earnings fully cash-backed (6.7×), but margins compressing and returns that lean on debt.
Operating profit is fully backed by cash. Conversion is improving vs a year ago.
Operating profit is falling even as sales grow, costs are outrunning the top line.
Leverage-amplified, a high assets-to-equity ratio does much of the work. ROE 28% = margin × turnover × leverage.
Unless marked, from derived.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is MELI?
MercadoLibre, Inc. earns 18% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
Return on invested capital · cost of capital 9.0% · 8.6 points above what the capital costs: growth creates value
- Operating margin
- 8.3%
Operating margin · Internet Retail median 6.0% · 12 months to Q2 2026
- Cash conversion
- 6.69×
Cash conversion · 3.77× a year ago · operating cash flow covers the operating profit after tax
- Share count, year on year
- 0.00%
Share count, year on year · flat: no meaningful dilution
| Year | Operating margin |
|---|---|
| FY2020 | 3.2% |
| FY2021 | 6.2% |
| FY2022 | 9.9% |
| FY2023 | 15% |
| FY2024 | 13% |
| FY2025 | 11% |
Details›
- Gross margin12 months to Q2 2026
- 43%
- Operating margin12 months to Q2 2026
- 8.3%
- Net margin12 months to Q2 2026
- 5.3%
- Free cash flow margin
- 35%
- R&D as % of revenue
- 7.3%
- Revenue, trailing twelve months
- $35.2B
- Free cash flow, trailing twelve months
- $12.4B
- Net income, trailing twelve months
- $1.86B
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 18%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.
Internet Retail
Ranks #2 of 14 by RyuScore