MercadoLibre's stock experienced a significant overnight plunge of 5.35%, following the release of its first-quarter financial results after market close.

The sharp decline was primarily driven by the company's earnings miss, with Q1 EPS of $8.23 falling short of analyst expectations. Net profit dropped 15.6% year-over-year to $417 million, below estimates and marking the second consecutive quarter of profit decline. The company attributed the lower profits to increased investments in logistics, credit expansion, and free shipping initiatives aimed at gaining long-term market share.

Adding to the negative sentiment, Scotiabank cut its price target on MercadoLibre. Despite the profit concerns, the company reported strong revenue growth of 49% to $8.85 billion, which surpassed analyst projections, representing the fastest revenue growth in nearly four years.