MELI vs. EBAY: Which Online Marketplace Stock Is the Better Pick?

MercadoLibre MELI and eBay EBAY are household names in online marketplaces, linking millions of buyers and sellers through digital platforms. MercadoLibre dominates Latin America with a combined commerce, payments and logistics model. eBay runs a leaner global platform spanning over 190 markets, with an emphasis on collectibles, luxury goods and auto parts.As both companies navigate shifting consumer habits and competitive pressures, the central question becomes which marketplace is positioned to deliver stronger value over the long run. Let’s delve deeper to find out.The Case for MELIMercadoLibre has expanded into a broad commerce and payments ecosystem across Latin America, combining marketplace services with Mercado Pago, a fast-growing credit portfolio, advertising and logistics that now handles more than 50% of shipments. This integrated approach has supported scale, but it has also raised the cost of sustaining growth.Competition is intensifying in core markets. TikTok Shop and Shopee are gaining traction in Brazil, while Amazon is allocating more resources across the region. In response, MercadoLibre lowered its free shipping threshold, cut seller fees, and stepped up promotions during the second quarter. These moves supported transaction volumes but pushed operating margin down 210 basis points year over year to 12.2%. Marketing costs rose nearly 50%, highlighting how expansion is being maintained through incentives rather than efficiency.Mercado Pago is growing rapidly, but adding risk. The credit portfolio rose 91% year over year to $9.3 billion, with credit cards now close to half of balances. Delinquencies improved slightly, yet provisions increased and foreign exchange losses doubled to $117 million. This mix of aggressive lending and volatile currencies leaves earnings vulnerable to disruption.Regional GMV growth of more than 30% in Brazil and Mexico and over 70% in Argentina demonstrates demand. However, that momentum continues to depend on costly subsidies and logistics expansion, suggesting that pressure on profitability and cash flow is not temporary but an ongoing feature of the business.The Zacks Consensus Estimate for MELI’s third-quarter 2025 earnings is pegged at $9.88 per share, unchanged over the past 30 days. The figure indicates a 26.18% increase year over year.MercadoLibre, Inc. Price and Consensus MercadoLibre, Inc. price-consensus-chart | MercadoLibre, Inc. QuoteThe Case for EBAYeBay runs a transaction-based marketplace that connects buyers and sellers without owning inventory or fulfillment assets. Monetization depends on take rates, advertising and payment services. This model lowers capital intensity and allows consistent margin delivery, but it leaves the platform more reliant on buyer activity and less differentiated on logistics compared with peers that control the end-to-end experience.In the second quarter of 2025, revenues rose 6% year over year to $2.7 billion, supported by Gross Merchandise Volume (GMV) growth of 6% to $19.5 billion. Operating margin expanded 50 basis points to 28.4%, supported by efficiency initiatives. Advertising revenue reached $482 million, up 19% year over year, representing 2.5% of GMV. Deeper adoption of promoted listings shows progress, though underlying GMV growth remains modest relative to the wider e-commerce industry.eBay has introduced initiatives to support engagement. AI-driven tools are being used to improve listings and recommendations, livestream commerce via eBay Live is expanding in the U.K. and the United States, and the Klarna partnership is widening payment options for buyers. These moves highlight adaptation, but their impact on driving buyer growth or lifting transaction volumes has so far been limited.Although eBay’s business appears steadier compared with MercadoLibre, it faces its own set of challenges. GMV growth remains modest, category focus is weighted toward mature segments, and larger rivals continue to invest heavily in logistics and customer experience. While margins and advertising provide resilience, these factors limit the scope for acceleration, leaving eBay positioned more as a stable operator than a growth leader in global e-commerce.The Zacks Consensus Estimate for eBay’s third-quarter 2025 earnings is pegged at $1.33 per share, unchanged over the past 30 days. The figure indicates an 11.76% increase year over year.eBay Inc. Price and Consensus eBay Inc. price-consensus-chart | eBay Inc. QuotePrice Performance and Valuation of MELI and EBAYIn the year-to-date (YTD) period, EBAY shares have rallied 43.4%, while MELI shares have increased 40.6%. Both have outperformed the Zacks Internet-Commerce industry’s appreciation of 14.1%. EBAY’s rally has been supported by its global exposure and stable execution, whereas MELI’s share gains mask the strain of rising costs and intensifying competition.EBAY Outperforms MELI, Industry in YTDImage Source: Zacks Investment ResearchValuation-wise, both MELI and EBAY’s shares appear stretched as suggested by a Value Score of D. MELI trades at 3.67x forward 12-month Price/Sales, a premium that looks difficult to justify given margin compression, rising credit exposure and ongoing cost pressures. EBAY trades at 3.62x forward 12-month Price/Sales, which is more defensible in light of its global exposure, stable margins and growing advertising revenues.Price/Sales (F12M)Image Source: Zacks Investment ResearchConclusioneBay stands out with global exposure, stable margins, and growing advertising revenues. Its stronger share price rally reflects investor confidence in this model and the valuation is supported by these steady fundamentals. MercadoLibre, on the other hand, continues to grapple with competitive intensity, margin pressure, and rising credit risk, with stretched valuations reinforcing caution. Considering these factors, eBay’s Zacks Rank #3 (Hold) positions it more favorably than MercadoLibre’s Zacks Rank #4 (Sell).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Radical New Technology Could Hand Investors Huge GainsQuantum Computing is the next technological revolution, and it could be even more advanced than AI.While some believed the technology was years away, it is already present and moving fast. Large hyperscalers, such as Microsoft, Google, Amazon, Oracle, and even Meta and Tesla, are scrambling to integrate quantum computing into their infrastructure.Senior Stock Strategist Kevin Cook reveals 7 carefully selected stocks poised to dominate the quantum computing landscape in his report, Beyond AI: The Quantum Leap in Computing Power.Kevin was among the early experts who recognized NVIDIA's enormous potential back in 2016. Now, he has keyed in on what could be "the next big thing" in quantum computing supremacy. Today, you have a rare chance to position your portfolio at the forefront of this opportunity.See Top Quantum Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report eBay Inc. (EBAY): Free Stock Analysis Report MercadoLibre, Inc. (MELI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks