Is MercadoLibre, Inc. overvalued or undervalued?

As of 7 May 2025, MercadoLibre, Inc. has moved from a fair to an expensive valuation grade, indicating that it is currently overvalued. The company's P/E ratio stands at 61, while its EV to EBITDA ratio is 35.73 and the Price to Book Value is 25.15. These metrics suggest that the stock is trading at a premium compared to its earnings and book value.
In comparison to peers, MercadoLibre's P/E ratio of 58.78 is higher than Amazon.com, Inc. at 36.48 and eBay, Inc. at 55.51, both of which are also considered expensive but not as high as MercadoLibre. Additionally, the PEG ratio of 0.74 indicates that growth expectations may not justify the current price. Despite a strong return of 53.30% over the past year compared to the S&P 500's 10.26%, the valuation metrics suggest that MercadoLibre is overvalued in the current market environment.