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Dlocal Limited (DLO)
:DLO
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DLocal
(NASDAQ:DLO)
Select Model
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Rating:73Outperform
Price Target:
$14.50
▼(-2.62% Downside)
DLocal's strong financial performance and positive earnings call are significant strengths, driving the overall score. However, the high P/E ratio suggests overvaluation, and technical indicators show limited momentum, which tempers the overall outlook.
Positive Factors
Revenue Growth
Sustained high revenue growth indicates strong demand for dLocal's services, enhancing its market position and potential for future expansion.
Geographic Diversification
Improved geographic diversification reduces dependency on any single market, mitigating risks and stabilizing revenue streams across regions.
Operational Efficiency
Strong operational efficiency and profitability metrics highlight dLocal's ability to manage costs effectively, supporting long-term margin sustainability.
Negative Factors
Currency Devaluation Impact
Currency devaluation in key markets like Argentina can significantly affect profitability, posing a risk to financial stability if such trends persist.
Cash Flow Management
Challenges in cash flow management could strain liquidity, limiting dLocal's ability to invest in growth opportunities or weather financial downturns.
Regulatory Risks
Potential regulatory changes could disrupt operations and increase costs, impacting dLocal's ability to maintain its competitive edge in key markets.
DLocal (DLO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.35B
Dividend YieldN/A
Average Volume (3M)3.63M
Price to Earnings (P/E)29.3
Beta (1Y)1.16
Revenue Growth22.02%
EPS Growth12.42%
CountryUS
Employees1,095
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)0.17
Shares Outstanding164,649,320
10 Day Avg. Volume4,305,833
30 Day Avg. Volume3,625,161
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap0.62
Enterprise Value/Revenue3.12
Enterprise Value/Gross Profit7.80
Enterprise Value/Ebitda11.63
Forecast
1Y Price Target
$15.25Price Target Upside2.42% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering8
DLocal Business Overview & Revenue Model
Company DescriptionDLocal (DLO) is a leading payment technology company that specializes in providing cross-border payment solutions for global merchants in emerging markets. The company operates primarily in Latin America, Asia, and Africa, enabling businesses to accept local payments, send payouts, and facilitate transactions in various currencies. DLocal's core products include payment processing for online businesses, fraud detection and prevention services, and local payment methods tailored to each market's needs.
How the Company Makes MoneyDLocal generates revenue primarily through transaction fees charged to merchants for processing payments. This includes fees for both incoming transactions (when customers make payments) and outgoing transactions (when merchants make payouts to users). In addition to these transaction fees, DLocal may earn revenue from value-added services such as fraud prevention tools, currency conversion, and analytics services provided to merchants. Significant partnerships with local banks and financial institutions enhance DLocal's service offerings and expand its reach in various regions, thereby contributing to its revenue growth.
DLocal Earnings Call Summary
Earnings Call Date:Aug 13, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 18, 2025
Earnings Call Sentiment Positive
The earnings call reflected strong financial performance and growth across key markets, with record-breaking metrics and strategic expansions driving a positive outlook. However, the impact of currency devaluation and potential external regulatory risks presented some challenges.Q2-2025 Updates
Positive Updates
Record-Breaking TPV and Revenue Growth
Total Payment Volume (TPV) reached a record high of $9.2 billion, marking a 53% year-over-year increase and a 14% quarter-over-quarter increase. Revenue also hit an all-time high of $256 million, growing 50% year-over-year.
Strong Performance in Core Markets
Brazil and Mexico rebounded with strong performance, contributing to revenue growth alongside other fast-growing geographies.
New Licenses and Product Innovation
dLocal added new licenses in the UAE, Turkey, and the Philippines, and launched innovative products like SmartPix in Brazil and Buy Now Pay Later integrations.
Increased Guidance
The company expects to end the year at the upper limit of previous guidance for TPV and revenue, and exceed the upper limit for gross profit and adjusted EBITDA.
Operational Efficiency
Achieved a record gross profit of $99 million, with an adjusted EBITDA of $70 million, marking a 64% year-over-year increase. The adjusted EBITDA to gross profit ratio improved for the fifth consecutive quarter to 71%.
Negative Updates
Argentine Peso Devaluation Impact
Net income was negatively impacted by the Argentine peso devaluation, reducing it to $43 million. Excluding these effects, net income would have been $53 million.
Challenges in Egypt
Experienced partial volume loss due to a large merchant implementing redundancies and lower FX spreads due to the currency devaluation.
Potential Risks from Tariffs and Regulations
Highlighted risks from potential tariffs on cross-border e-commerce in Mexico and other regulatory changes that could impact future performance.
Company Guidance
In the recent earnings call for the second quarter of fiscal year 2025, dLocal Limited announced a record high total payment volume (TPV) of $9.2 billion, marking their third consecutive quarter of over 50% year-over-year growth. Revenue and gross profit also reached new peaks of $256 million and $99 million, respectively. The company reported a net income of $43 million, which was impacted by the devaluation of the Argentine peso, but noted that without this effect, net income would have been $53 million. Free cash flow for the quarter was strong at $48 million. The company's geographic diversification improved, with the top three markets now accounting for less than 50% of revenues. Additionally, adjusted EBITDA grew by 64% year-over-year to $70 million, highlighting a frugal operational culture and efficiency. The company is optimistic about H2 2025, expecting to reach the upper limit of its guidance for TPV and revenue, while forecasting gross profit and adjusted EBITDA to exceed expectations. The guidance comes with caution due to potential global economic and regulatory risks.DLocal Financial Statement Overview
Summary
DLocal shows strong financial health with robust revenue growth and profitability. The balance sheet is particularly strong, with low leverage and high return on equity. However, cash flow management poses some challenges, particularly in the TTM period, which could impact liquidity if not addressed.Income Statement
DLocal has demonstrated strong revenue growth with a TTM increase of 10.94% and a robust annual growth trajectory. The company maintains healthy profitability margins, with a TTM gross profit margin of 40.03% and a net profit margin of 16.90%. EBIT and EBITDA margins are also solid at 24.54% and 26.84%, respectively. However, there is a slight decline in gross profit margin over the years, which could be a point of concern if the trend continues.85
Very Positive
Balance Sheet
The balance sheet is strong, characterized by a very low debt-to-equity ratio of 0.0087 in the TTM, indicating minimal leverage and financial risk. The return on equity is impressive at 30.10%, reflecting efficient use of equity capital. The equity ratio stands at 36.68%, showcasing a stable financial structure with a good proportion of equity financing.90
Very Positive
Cash Flow
Cash flow analysis reveals some challenges, with a significant drop in free cash flow growth in the TTM. The operating cash flow to net income ratio is relatively low at 0.15, suggesting potential issues in converting income into cash. However, the free cash flow to net income ratio is healthy at 76.75%, indicating decent cash generation relative to net income.70
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 863.48M | 745.97M | 650.35M | 418.93M | 244.12M | 104.14M |
| Gross Profit | 345.65M | 294.67M | 276.86M | 202.17M | 130.44M | 60.08M |
| EBITDA | 231.74M | 168.91M | 184.21M | 153.10M | 90.79M | 32.48M |
| Net Income | 145.90M | 120.42M | 148.96M | 108.68M | 77.88M | 28.18M |
Balance Sheet | ||||||
| Total Assets | 1.22B | 1.17B | 1.08B | 826.30M | 583.01M | 200.47M |
| Cash, Cash Equivalents and Short-Term Investments | 602.47M | 566.11M | 638.84M | 469.39M | 337.20M | 52.00M |
| Total Debt | 3.90M | 54.45M | 3.96M | 4.08M | 8.94M | 218.00K |
| Total Liabilities | 773.13M | 682.34M | 629.31M | 426.68M | 302.71M | 155.42M |
| Stockholders Equity | 447.96M | 488.89M | 455.03M | 399.63M | 280.32M | 45.05M |
Cash Flow | ||||||
| Free Cash Flow | 90.81M | -34.49M | 275.23M | 142.10M | 60.47M | 84.60M |
| Operating Cash Flow | 118.31M | -32.78M | 293.45M | 154.45M | 108.49M | 88.49M |
| Investing Cash Flow | -38.89M | -17.75M | -84.67M | 4.30M | -37.94M | 3.65M |
| Financing Cash Flow | -126.78M | -68.59M | -133.87M | -27.33M | 153.75M | -15.20M |
DLocal Technical Analysis
Positive
14.89
Price Trends
12.56
Positive
11.41
Positive
10.88
Positive
Market Momentum
0.46
Positive
65.42
Neutral
82.39
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DLO, the sentiment is Positive. The current price of 14.89 is above the 20-day moving average (MA) of 14.13, above the 50-day MA of 12.56, and above the 200-day MA of 10.88, indicating a bullish trend. The MACD of 0.46 indicates Positive momentum. The RSI at 65.42 is Neutral, neither overbought nor oversold. The STOCH value of 82.39 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DLO.
DLocal Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | 2.44B | 25.22 | 12.95% | ― | 13.02% | -2.57% | |
73 Outperform | $4.35B | 29.33 | 32.78% | ― | 22.02% | 12.42% | |
73 Outperform | 3.51B | 8.55 | 15.03% | 1.30% | 0.09% | 5.38% | |
69 Neutral | 3.59B | 277.40 | 1.84% | ― | 35.12% | 0.00% | |
68 Neutral | 3.64B | 12.20 | 24.48% | ― | 8.71% | 25.75% | |
56 Neutral | 5.16B | -28.43 | -10.95% | ― | -20.82% | -154.29% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
Performance Comparison
DLO
DLocal
14.89
7.11
91.39%
EEFT
Euronet Worldwide
89.22
-11.44
-11.36%
PAGS
Pagseguro Digital
10.64
1.85
21.05%
STNE
Stoneco
19.18
7.88
69.73%
PAYO
Payoneer
6.64
-0.94
-12.40%
RELY
Remitly Global
17.31
3.18
22.51%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.