Alibaba Group Holding Ltd ADR (BABA) is overvalued and MercadoLibre Inc (MELI) is overvalued.
Both trade above our estimate of their intrinsic value. MELI is the closer of the two: -72%, against -144% for BABA.
Values as of the 22 Sept 2026 close.
Discounting its cash flows at 7.7% (average of 3 methods) values the shares at $47.61; the price of $116.31 is 144% above that value, and 81% of that value comes from beyond year five.
Leak Score 27/100 on 3 of 12 signals
Discounting its cash flows at 10.1% (average of 3 methods) values the shares at $1060.60; the price of $1826.58 is 72% above that value, and 74% of that value comes from beyond year five.
Leak Score 59/100 on 3 of 12 signals
| Metric | BABA | MELI |
|---|---|---|
| Verdict | Overvalued | Overvalued |
| Price | $116.31 | $1826.58 |
| Intrinsic value | $47.61 | $1060.60 |
| Margin of safety | -144% | -72% |
| Leak Score | 27/100 (3/12) | 59/100 (3/12) |
| Market cap | $289.1B | $92.6B |
| Revenue growth, 5 years | 6.4% | 48.7% |
| Operating margin | 4.1% | 8.3% |
| Net margin | 7.0% | 5.3% |
| Return on equity | 7.1% | 27.5% |
| Debt to equity | 0.25 | 2.34 |
| P/E | 27.4x | 49.7x |
| Forward P/E | 12.7x | 33.4x |
| P/B | 1.8x | 11.8x |
| Dividend yield | 0.9% | — |