In the firms latest projection, Goldman Sachs forecasts Mercado Libres ad revenue to reach $4 billion by 2028.This figure quadruples the expected 2024 revenue of $1 billion, showcasing the companys remarkable growth trajectory.Analysts Irma Sgarz and Felipe Rached attribute this surge to the expanding digital advertising market in Latin America.Founded in 1999, the Argentine company has become the most valuable in Latin America.
Mercado Libre has skillfully leveraged its competitive advantages, positioning itself to capture 3.5% of the Latin American advertising market by 2026.This growth reflects both market expansion and the effectiveness of the companys advertising strategy.Mercado Libres Ad Revenue Projected to Hit $4 Billion by 2028 Mercado Libre Headquarters in Buenos Aires.
(Photo Internet reproduction)Goldman Sachs has revised its estimates upward, increasing Mercado Libres net revenue and EBIT projections by an average of 5% from 2024 to 2026.
The firm maintains its buy recommendation for the companys stock, setting a target price of $2,670.Mercado Libres advertising business boasts impressive profitability, with estimated EBIT margins between 70% and 80%.In 2023, ad revenue already accounted for over 20% of the companys consolidated EBIT, expected to approach 30% by 2028.While ad revenue represented only 5% of total revenue in 2023, it is projected to double by 2028.
The report highlights Latin Americas advertising growth potential and Mercado Libres prime position to benefit from the digitalization of ad spending.Mercado Libres Ad Revenue Projected to Hit $4 Billion by 2028The company dominates the retail media market in Latin America, holding about 55% market share in 2023.In Brazil, Mercado Libres presence is even stronger, commanding approximately 65% of the market.Despite these positive outlooks, Goldman Sachs notes some structural differences that may limit Mercado Libres advertising sector expansion.These include lower market penetration compared to giants like Amazon and the absence of a streaming service offering.As Mercado Libre continues to evolve, its journey from an e-commerce platform to a digital advertising powerhouse exemplifies the dynamic nature of Latin American markets.The companys ability to adapt and innovate will likely shape its future success in this rapidly changing landscape.