Shares of Uruguay-based financial technology firm DLocal Ltd. (NASDAQ:DLO) have been slipping since the release of its second-quarter results after the market closed on Monday. The decline in the stock price could have been triggered by the fall in the company’s gross and adjusted EBITDA margins, despite its upbeat quarterly results.
A 72% year-over-year surge in revenues was offset by increasing costs at the online payment platform provider, which could have led to the company’s stock falling 9.4% in the extended trading session on Monday. The fall continued and the stock was trading 9.5% down early Tuesday, at the time of writing.
Q2 Results in Detail
Revenues: Revenues grew 72% year-over-year to $101.2 million, beating the consensus estimate of $99.29 million. Total Payment Volume (TPV) jumped 67% to $2.4 billion.
Gross Profit: Gross profit rose 47% year-over-year to $49.6 million, while gross margin fell 825 basis points to 49.1%.
Adjusted EBITDA: Adjusted EBITDA jumped 47% year-over-year to $38.2 million. Meanwhile, the adjusted EBITDA margin stood at 38%, compared to 44% in the second quarter of last year.
EPS: Earnings increased 73% year-over-year to 10 cents per share, coming in line with the Street’s expectation.
Cash: The company ended the quarter with cash, cash equivalents, and marketable securities of $454 million versus $410.1 million at the end of the first quarter of 2022.
In a press release, the company said, “We remain focused on building the best financial infrastructure for our merchants across multiple emerging markets. Our expansion efforts outside Latin America continue to yield results, as revenues in Africa and Asia increased triple digit by 155% year-over-year, representing 13% of our total revenues in this quarter.”
Is DLocal Stock a Buy or Sell?
On TipRanks, DLocal has a Moderate Buy consensus rating based on two Buys. DLO’s average stock forecast of $34.50 implies 16.5% upside potential to current levels.
Just like analysts, bloggers are also positive about the stock. Data from TipRanks shows that financial bloggers are 88% Bullish on DLO, compared to the sector average of 66%.
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