MercadoLibre (NASDAQ:MELI) under pressure from margin test as high-value user growth quickens

MercadoLibre dropped in after-hours trading Thursday, as the Latin American e-commerce and fintech firm posted a first-quarter profit decline. That overshadowed a 49% surge in revenue, which still beat Wall Street’s forecasts. Results for the quarter ended March 31 landed after U.S. markets closed.

MercadoLibre shares slid more than 6% in after-hours trade Tuesday, hit by a profit miss for the quarter as spending on credit and logistics pressured margins. The Uruguay-based e-commerce and payments firm posted net income of $559 million for October through December, short of the $587 million analysts surveyed by LSEG had penciled in, though revenue jumped roughly 45% to $8.8 billion. “Margin compression” explained the earnings miss, according to Leandro Cuccioli, senior vice president of investor relations, who likened the region’s e-commerce growth to “minute 15 of the first half.”

MercadoLibre Inc slipped roughly 0.3% to $2,020 in afternoon trading Wednesday, after bouncing around in a $1,974 to $2,054 range. Shares had started the session at $2,053, not far from Tuesday’s close at $2,025.32.

MercadoLibre Inc shares bounced 1.8% higher to close at $2,004.94 on Monday, regaining ground above the $2,000 line after slipping as low as $1,962.64 earlier in the session.

Shares of MercadoLibre dropped 1.1% to $2,029.60 Thursday afternoon, after hitting a high of $2,092.41 earlier in the session. The stock had closed at $2,052.78 previously.

Shares of MercadoLibre, Inc. surged 4.7% in after-hours trading Thursday, finishing at $2,153.75. The stock swung between $2,079.85 and $2,162.82 throughout the session. About 872,827 shares changed hands, per the data.