One of the biggest tech success stories that Latin America has seen in decades recently reported that sales in the June quarter came in at $1.7 billion. That amounted to a double from the year-ago period and handily beat Wall Street forecasts.

Make no mistake. This is no run-of-the-mill firm. In fact, it’s often referred to as the “Amazon of Latin America.”

Talk about a rocket ship. The stock is up some 195% since I last told you about it a little more than two years ago.

And just like Amazon itself, past gains are no sign that this company will slow down. If anything, it’s just the opposite…

Fast-Growing Market

Ecommerce is taking off in Latin America in a big way, and that is a big advantage for this leading player already operating in 18 countries.

According to Statista, the region already has some 300 million digital customers, with a projected 20% growth by 2025 boosting that number to around 360.

And on top of that, online retail is projected to almost double to $160 billion by 2025.

Latin America lags behind other emerging market regions when it comes to the adoption of e-commerce, but the way I see it, that just means that there’s even more outstanding growth potential out there.

Bear in mind that the same pressure towards online that Covid has created in the rest of the world applies just as much in Latin America.

With the increased reliance on e-commerce because of the pandemic, the struggles to meet this crisis have shown the whole world just how important these online services can be. It’s the same as when Amazon sales skyrocketed during the peak of the disease in the US.

And the firm I have in mind today, Mercado Libre Inc. (MELI) is every bit as powerful in the Latin America region as Amazon is in North America, with staying power for years to come.

Outdoing Amazon

Much like many tech behemoths from Silicon Valley like Hewlett Packard and Google, Mercado Libre Inc. (MELI) started out of a garage.

Launched in Buenos Aires in 1999, the company was able to turn a profit by 2006, raking in $52 million in revenue and $1.1 million net income. By 2007 Mercado Libre had its IPO, which raised an additional $289 million.

Since its origin, the firm has created a diverse business model for itself focusing on increasing e-commerce. The Marketplace is the main source of traffic and income with additional business units related to finance, logistics, payment, advertising, and software services.

Today, the site gets up to 668 million monthly visits in Latin America with Amazon getting a measly 169 million within the same region.

I see Mercado Libre continuing to expand and set record-breaking numbers within the company. Their most recent quarterly report shows active users jumping 47% amounting to 75.9 million.

The Fintech Edge

And as I just mentioned, the company does more than just provide an online market for buyers and sellers to connect.

The firm is doing fabulously when it comes to fintech. Sales from financial technology services jumped 89% to $560.4 million.

Mercado Libre’s fintech businesses enable users to make contactless payments (a big plus during the pandemic. It also allows them to pay utility bills, make peer-to-peer transactions, pay for transportation tickets, and much more.

No wonder PayPal Holdings Inc. is a big backer of the firm.

In 2019, PayPal invested $750 million into Mercado Libre. The investment helped raise a total of $2 billion for the firm as part of a secondary offering.

Mercado Libre used the influx of cash to further expand the company’s operations and infrastructure.

And I don’t expect to see their growth easing any time soon.

Three Years to Double

With a massive population, comprised of over 635 million people and one of the quickest growing internet penetration rates in the world, the firm is well-positioned to keep profiting for years to come.

Analysts expect sales in the current quarter to climb another 70% from the year-ago quarter. Even better, adjusted earnings are expected to quadruple.

Add it all up and you can see why I continue to recommend the stock.

Since we last talked about it on July 5, 2019, it’s up 195%, beating the S&P 500 over the period by 324%.

Based on its current growth rate, I believe the firm can double earnings once again in as little as three years

I believe that this is a great way to invest in e-commerce growth in

Latin American.

And MELI is the kind of growth-centric tech leader that can have a huge impact on your tech portfolio – and help you achieve financial freedom.

Cheers and good investing,

— Michael A. Robinson

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Source: Strategic Tech Investor