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MercadoLibre (NASDAQ: MELI) recently closed above $1,950, roughly 26% below its 52-week high, even as the company crossed $10 billion in quarterly revenue for the first time and extended a streak of 30 consecutive quarters of at least 30% revenue growth.
Each of the most recent earnings releases drew a selloff: shares fell 12.7% after May results and dropped as much as 9% after the August report before settling about 4.5% lower.
Operating margin compressed to 6.7% from 12.2% a year earlier, and profit declined for a third straight quarter. The company attributed the margin move to deliberate investment rather than deteriorating economics.
CFO Martin de los Santos told analysts the company was choosing not to slow spending to protect near-term margins. "We are not optimizing for short-term margin," he said.
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