Chewy vs. MercadoLibre: Which E-Commerce Stock Is a Better Buy in 2026?
2026-10-15 16:00
•Mike Schwenk •The Motley Fool
••••• •• Axe Cap view
E-Commerce Clash: MercadoLibre Edges Out Chewy for Growth
MercadoLibre’s fast expansion trumps Chewy’s steady but slow pet retail growth, despite some risks.
Chewy offers reliable but sluggish growth, mainly driven by its loyal Autoship customers, which is about 85% of sales. It’s a steady operation but barely growing and barely profitable, with thin margins around 2.4%. Plus, management’s cautious stance on consumer health means don’t expect a sudden bounce. On the other side, MercadoLibre is growing at breakneck speed—near 40% revenue growth this year—fuelled by its hybrid e-commerce and fintech model across Latin America. This aggressive expansion means short-term profits take a hit and credit risks have ballooned with worsening loan losses. Add currency headwinds as the rand trades above 19 to the US dollar, and you get a volatile mix. For South African investors interested in growth and comfortable riding out that volatility, MercadoLibre looks more attractive, especially given its fintech edge which resembles emerging opportunities here. Chewy feels like a waiting game. This view could change if global consumer spending picks up rapidly, improving Chewy’s top line or if Latin America faces serious economic setbacks. this is just our opinion and not financial advice
Prefer buying MercadoLibre for growth exposure but keep position size moderate due to credit and FX risks. Wait on Chewy until we see meaningful margin improvements or clearer signs of consumer recovery.
- MELI
- CHWY
- USD/ZAR
- Rising credit defaults in Latin America
- Rand weakness increasing dollar costs
6/10
The article compares Chewy, a U.S. online pet retailer, and MercadoLibre, a Latin American e-commerce and fintech platform. MercadoLibre shows stronger revenue growth at 39.1% in 2025 versus Chewy's 6.2%, but both face challenges: Chewy has thin margins and single-digit growth, while MercadoLibre sacrifices profitability for expansion and faces credit risks. The author favors MercadoLibre as a long-term buy despite volatility, while viewing Chewy as steadier but requiring veterinary acquisitions to prove value.
Our take is based on reporting first published by The Motley Fool.