Two giants of global e-commerce – Amazon (AMZN) and MercadoLibre (MELI) – operate in vastly different markets but share similar ambitions: dominate their respective digital commerce landscapes. A side-by-side analysis reveals substantial differences in growth, profitability, capital efficiency, and valuation – all of which shape their stock behavior over time.

Revenue Growth: MELI Drives at Full Speed

MercadoLibre posted revenue growth of nearly 60% in 2020, maintaining strong double-digit growth in subsequent years. In contrast, Amazon began at about 40% in 2020 but decelerated to low single digits by 2023 and the last twelve months (LTM).

Dilution: Amazon Dilutes More

Amazon’s stock-based compensation as a percentage of revenue reached over 5% in 2023, versus a much more conservative 1%–2% at MELI. This represents a long-term risk for shareholder value in AMZN.

Free Cash Flow: MELI Gains Consistency

Between 2021 and 2023, Amazon’s free cash flow (FCF) dropped sharply, even turning negative in 2022. Meanwhile, MELI demonstrated steady FCF improvement, posting solid positive figures in the LTM period.

Stock Performance: MELI Outpaces Amazon

In the past 5 years, MercadoLibre’s stock gained an impressive +148.91%, compared to +58.58% for Amazon. This outperformance reflects strong fintech momentum through Mercado Pago and expanding e-commerce penetration across Latin America.

Valuation: Investors Pay a Premium for MELI

MELI’s price-to-gross profit multiple stands at 11x, compared to only 7x for Amazon. Investors clearly assign a premium to MELI’s future growth, despite its smaller scale and emerging-market risks.

Balance Sheet: Amazon Holds the Edge

Amazon has maintained a relatively low debt-to-equity ratio of around 100–120, while MELI’s ratio ranged between 200–300 in recent years – highlighting a higher financial risk profile for the Latin American firm.

Profitability: MELI Outperforms in Margins

In 2023, MELI achieved a gross margin above 50%, versus around 45% for Amazon. Furthermore, its FCF margin hit approximately 30%, while Amazon stayed below 10%.

Return on Capital: MELI Leads Decisively

MercadoLibre posted a Return on Capital of over 25% in the LTM, while Amazon remained in the 10%–12% range – a significant gap favoring MELI’s capital allocation efficiency.

Forward Outlook

Amazon offers massive scale and balance sheet strength but faces growth saturation in mature markets. MercadoLibre, on the other hand, continues to harness rapid expansion potential – with higher risk, but also higher potential rewards. For investors, the trade-off is clear: stability versus growth, predictability versus upside.