DLocal Posts Mixed Q3 Results; Shares Drop 10.6%

Technology-first payments platform DLocal Limited (DLO) has reported mixed results for the third quarter ended September 30, 2021. Following the earnings, shares of the company declined 10.6% to close at $42 in the extended trading session on Tuesday.

Revenue & Earnings

Quarterly revenues of $68.6 million surpassed the consensus estimate of $65.13 million. The company had posted revenues of $30.9 million in the same quarter last year. The growth in revenues can be attributed primarily to 217% year-over-year growth witnessed in Total Payment Volume to $1.8 billion.

Meanwhile, earnings per share (EPS) for the quarter stood at $0.06, up 50% year-over-year. The figure failed to surpass the consensus estimate of $0.07 per share.

Other Operating Metrics

In other operating metrics, DLO’s adjusted EBITDA and adjusted EBITDA margin for the quarter stood at $26.3 million and 38%, respectively, compared to $12.5 million and 41% in the year-ago period.

Management Commentary

The CEO of DLocal, Sebastian Kanovich, said, “We continue to see strong growth across multiple verticals as we see local economies continue to bounce back and global merchants prioritize their efforts in emerging markets. We continue to execute on our strategy to make the complex simple for our merchants. We continue to add new product capabilities on our platform that enhance our merchants’ ability to benefit from higher conversion.”

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Price Target

Consensus among analysts is a Hold based on 1 Buy and 3 Holds. The average DLocal price target of $64.50 implies upside potential of 37.2% from current levels.

Smart Score

DLocal scores an 8 out of 10 from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations. Shares have gained 45.1% over the past year.

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