This video analyzes the Q2 2025 earnings reports for three significant companies: Mercado Libre, Hims & Hers, and Brookfield Asset Management. For Mercado Libre, the speaker highlights strong top-line growth exceeding 30% year-over-year from a large base, along with accelerating commerce, fintech, and advertising segments, driven by strategic investments in free shipping and logistics. Despite a stock sell-off due to missed analyst profit expectations, the speaker views these investments as strengthening the company's competitive moat. Hims & Hers' report shows robust revenue growth but a concerning quarter-over-quarter decline in overall revenue attributed to regulatory changes affecting its GLP-1 drug compounding. The speaker raises red flags regarding decelerating core business subscriber growth and management's lack of transparency on non-GLP-1 revenue, questioning the company's long-term moat. Finally, Brookfield Asset Management is reviewed for its continued momentum, 16% fee-related earnings growth, significant asset monetizations, and new partnerships with entities like Google and Sweden. While acknowledging BAM as a high-quality business, the speaker deems its current valuation overpriced. The video also provides an update on the upcoming "Stock Unlock" app for investment analysis.
0:00 Introduction & Stock Unlock App Update: The video discusses the Q2 2025 financial reports for Mercado Libre, Hims, and Brookfield Asset Management. The speaker also announces that the "Stock Unlock" investment analysis app is nearing beta testing and aims for a September launch.
Mercado Libre (MELI)
0:43 Strong Performance & Strategic Investments: Despite a stock sell-off, Mercado Libre reported Q2 2025 net revenues and financial income of $6.8 billion (up 34% YoY), $64.6 billion in total payment volume (up 39% YoY), and $15.3 billion in gross merchandise volume (up 21% YoY).
1:40 Growth Over Profit in Q2: Income from operations ($825 million) and net income ($523 million) missed analyst expectations due to strategic investments in platform growth, including lowering the free shipping threshold in Brazil (from R79 to R19). The speaker views these investments as strengthening the company's competitive advantage.
3:07 Accelerating Commerce & Fintech: Investments in free shipping and logistics have accelerated "items sold" growth in Brazil (34% YoY in June) and Mexico (36% YoY). The fintech user base grew 38% YoY to 68 million monthly active users, with assets under management doubling to $13.8 billion. The credit card portfolio also grew significantly (118% YoY to $4 billion).
12:42 Impressive Long-Term Revenue Growth: Mercado Libre has compounded its revenue by 51% since 2018, achieving 20x revenue growth over that period, and continues to grow over 30% annually even at a scale of $24 billion in trailing twelve months (TTM) revenue.
14:00 High Free Cash Flow Potential & Fair Valuation: The speaker estimates Mercado Libre's free cash flow potential at around $5 billion annually, if it weren't aggressively investing in growth. This places its $120 billion market cap at an "extremely fair price" of 24x potential free cash flow for a business with a strong moat and consistent growth.
Hims & Hers (HIMS)
18:05 Revenue Decline & GLP-1 Impact: Hims reported $545 million in revenue (up 73% YoY), but this marked a quarter-over-quarter decline, the first in the company's history. This was expected due to the ending of semaglutide (GLP-1 drug) shortage, which previously allowed Hims to mass-compound and sell it commercially.
20:00 Decelerating Subscriber Growth: Subscriber growth has significantly decelerated, with only about 70,000 new subscribers gained in the previous quarter, a trend the speaker considers a "red flag" despite some subscribers potentially being off-boarded due to the GLP-1 change.
20:57 Expansion into New Health Offerings: Hims plans to launch hormone health offerings in coming months and introduce standalone lab testing and longevity-focused care in 2026, aiming for proactive health monitoring.
22:24 International Acquisition & Core Business Weakness: Hims acquired Zava Global, a European digital health provider, expecting it to add $50 million in revenue for the remainder of the year. However, Hims did not raise its Q3 or full-year 2025 revenue guidance, suggesting that the core business (non-GLP-1 revenue) is decelerating and declining quarter-over-quarter.
28:03 Lack of Transparency Concerns: The speaker criticizes Hims' management for not being transparent about the decline in its core business revenue, requiring investors to perform "financial wizardry" to uncover this data.
34:40 Valuation & Moat Concerns: The speaker estimates Hims' long-term free cash flow potential at $400 million annually (20% margin on $2 billion TTM revenue), resulting in a 30x free cash flow valuation. While not "insane" if Hims can achieve its 22% CAGR target, the speaker highlights significant concerns about the company's lack of a competitive moat due to many competitors and ongoing legal risks, leading to their personal decision to not buy the stock.
Brookfield Asset Management (BAM)
38:09 Solid Q2 Results & Strategic Partnerships: Brookfield Asset Management reported a strong Q2 2025, with fee-related earnings up 16% and distributable earnings up 12%. The company announced sales of over $55 billion in assets year-to-date, demonstrating robust demand.
39:16 High-Profile Collaborations: Notable transactions include a framework agreement with Google to deliver up to 3,000 megawatts of carbon-free hydroelectric capacity in the US (the world's largest corporate clean power deal for hydro) and a $10 billion investment agreement with Sweden for digital infrastructure supporting AI.
40:10 Capital Deployment & Monetization: BAM deployed $28 billion in capital in Q2 and monetized $36 billion in assets since the start of Q2, realizing significant carried interest. The company projects about $1.1 billion in extra annual earnings from invested client capital.
42:25 Overvalued Stock: Despite being a "fantastic business" with 56% profit margins and 16% annual growth, the speaker believes Brookfield Asset Management's stock is currently "overvalued" at approximately 40.3 times its trailing twelve months distributable earnings ($62.93 stock price / $1.56 DE per share). This high valuation was the reason the speaker previously sold their BAM shares to invest in the parent company, Brookfield Corporation (BN).