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Dlocal Limited (DLO)
:DLO
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DLocal
(NASDAQ:DLO)
63Neutral
Positive Factors
Emerging Markets Opportunity
Management reiterated the attractive growth opportunity from digitalization of consumption in emerging markets, potential to gain share of wallet, and expand with merchants to new markets and products.
Revenue Growth
DLocal's 4Q revenues grew 9% to $204.5M, driven by TPV growth of 51%, and gross profit grew 20% to $83.7M, modestly beating expectations.
Negative Factors
Financial Performance
Shares of DLocal are down sharply (~19%) after-hours, as 4Q results had a lower gross profit take rate, and ’25 guidance was light on GP/GP take rate/adj. EBITDA.
Market Competition
Operations in Brazil face challenges due to lower TPV growth and fiercer competition.
Profitability Challenges
DLocal backed away from its medium-term guide due to volatility in emerging markets, and ongoing take rate compression as DLO ramps growth of Tier 0 merchants.
DLocal (DLO) vs. S&P 500 (SPY)
Market Cap
$2.76B
Dividend YieldN/A
Average Volume (3M)1.70M
Price to Earnings (P/E)19.4
Beta (1Y)0.58
Revenue Growth33.84%
EPS Growth0.29%
CountryUS
Employees901
SectorTechnology
Sector Strength46
IndustrySoftware
Share Statistics
EPS (TTM)0.45
Shares Outstanding150,763,440
10 Day Avg. Volume849,471
30 Day Avg. Volume1,698,891
Financial Highlights & Ratios
PEG Ratio67.34
Price to Book (P/B)N/A
Price to Sales (P/S)4.30
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$12.86Price Target Upside46.47% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
DLocal Business Overview & Revenue Model
Company DescriptionDLocal Limited operates a payments platform in the United States, Europe, China, and internationally. Its payments platform enables merchants to get paid and to make payments online. The company serves commerce, streaming, ride-hailing, financial services, advertising, software as a service, travel, e-learning, on-demand delivery, gaming, and crypto industries. DLocal Limited was founded in 2016 and is headquartered in Montevideo, Uruguay.
How the Company Makes MoneyDLocal makes money primarily through transaction fees charged to merchants for processing payments using its platform. This includes fees for both accepting payments from customers and for disbursing payouts. The company leverages its local payment methods and partnerships with banks and financial institutions to facilitate seamless transactions in emerging markets. Additionally, DLocal may earn revenue from currency conversion fees and value-added services provided to merchants, such as fraud prevention and analytics tools. Strategic partnerships with global merchants looking to expand into new markets also contribute to its revenue streams.
DLocal Financial Statement Overview
Summary
DLocal exhibits robust revenue growth and a strong gross profit margin, reflecting competitive positioning in the software industry. However, the decline in return on equity and negative cash flow trends may warrant closer attention to operational efficiency and cash management strategies.Income Statement
DLocal shows strong revenue growth, with a remarkable increase from $552.89 million in 2019 to $745.97 million in 2024. The gross profit margin remains robust, indicating effective cost management. However, the net profit margin has decreased from 22.9% in 2023 to 16.1% in 2024, suggesting higher operational costs or other expenses impacting net income.82
Very Positive
Balance Sheet
The balance sheet reflects a solid equity base with an equity ratio of 41.7% in 2024, indicating good financial stability. The debt-to-equity ratio remains low, showcasing prudent leverage management. However, the return on equity declined from 32.7% in 2023 to 24.6% in 2024, signaling a dip in efficiency.78
Positive
Cash Flow
The company experienced a significant drop in operating cash flow from $293.45 million in 2023 to -$32.78 million in 2024, impacting the free cash flow. The free cash flow to net income ratio is concerning as it turned negative, highlighting cash flow issues despite positive net income.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 745.97M | 650.35M | 418.93M | 244.12M | 104.14M | Gross Profit |
| 294.67M | 276.86M | 202.17M | 130.44M | 60.08M | EBIT |
| 140.50M | 179.66M | 127.91M | 83.84M | 30.95M | EBITDA |
| 157.90M | 184.21M | 153.10M | 90.79M | 32.48M | Net Income Common Stockholders |
| 120.42M | 148.96M | 108.68M | 77.88M | 28.18M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 554.49M | 638.84M | 469.39M | 337.20M | 52.00M | Total Assets |
| 1.17B | 1.08B | 826.30M | 583.01M | 200.47M | Total Debt |
| 54.45M | 3.96M | 4.08M | 8.94M | 218.00K | Net Debt |
| -370.72M | -218.85M | -464.01M | -327.25M | -43.47M | Total Liabilities |
| 682.34M | 629.31M | 426.68M | 302.71M | 155.42M | Stockholders Equity |
| 488.89M | 455.03M | 399.63M | 280.32M | 45.05M |
| Cash Flow | Free Cash Flow | |||
| -34.49M | 275.23M | 142.10M | 60.47M | 84.60M | Operating Cash Flow |
| -32.78M | 293.45M | 154.45M | 108.49M | 88.49M | Investing Cash Flow |
| -17.75M | -84.67M | 4.30M | -37.94M | 3.65M | Financing Cash Flow |
| -68.59M | -133.87M | -27.33M | 153.75M | -15.20M |
DLocal Technical Analysis
Negative
8.78
Price Trends
11.35
Negative
11.08
Negative
9.65
Negative
Market Momentum
-0.65
Negative
37.76
Neutral
47.74
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DLO, the sentiment is Negative. The current price of 8.78 is below the 20-day moving average (MA) of 9.16, below the 50-day MA of 11.35, and below the 200-day MA of 9.65, indicating a bearish trend. The MACD of -0.65 indicates Negative momentum. The RSI at 37.76 is Neutral, neither overbought nor oversold. The STOCH value of 47.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DLO.
DLocal Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $2.69B | 6.57 | 15.39% | ― | 8.26% | 20.41% | |
76 Outperform | $111.09B | 55.05 | 51.50% | ― | 43.56% | 91.72% | |
74 Outperform | $70.10B | 17.50 | 20.00% | ― | 7.10% | 4.45% | |
73 Outperform | $37.99B | 12.98 | 14.50% | ― | 10.06% | 38060.98% | |
63 Neutral | $2.76B | 19.44 | 26.10% | ― | 33.84% | 0.29% | |
63 Neutral | $3.36B | 8.73 | -9.48% | ― | -8.52% | -180.71% | |
58 Neutral | $21.67B | 10.60 | -18.43% | 2.42% | 4.66% | -24.45% |
* Technology Sector Average
Performance Comparison
DLO
DLocal
8.87
-5.83
-39.66%
MELI
Mercadolibre
2,095.85
583.89
38.62%
PYPL
PayPal Holdings
68.86
1.87
2.79%
XYZ
Block
56.99
-27.59
-32.62%
PAGS
Pagseguro Digital
8.16
-6.12
-42.86%
STNE
Stoneco
11.45
-5.16
-31.07%
DLocal Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: -36.15% | Next Earnings Date: May 20, 2025
Earnings Call Sentiment Positive
The earnings call highlighted dLocal's strong growth in TPV and financial performance, driven by geographic expansion and product innovation. However, challenges such as take rate compression and currency devaluation impacts were noted. Despite these challenges, the overall sentiment is positive due to the company's strategic focus on market expansion and operational improvements.Highlights
Record TPV Growth
Total Payment Volume (TPV) increased by 45% year-over-year, reaching a record of $26 billion for 2024.
Strong Financial Performance
Gross profit reached $295 million with an adjusted EBITDA of $189 million, maintaining a solid margin of 64%.
Expansion of Payment Solutions
Launched 20 new payment methods for pay-ins, 7 for payouts, and added nearly 100 new partner integrations.
Customer Support Improvements
Reduced customer support response time by 88% and issue resolution time by 45% through AI implementation.
High TPV Retention Rate
Achieved a TPV retention rate of over 140% in 2024.
Global Expansion
Secured nine new licenses globally, including an Authorized Payment Institution License from the UK's FCA.
Lowlights
Take Rate Compression
Take rate decreased to 1.1% due to higher volumes, increased payout share, and emerging market currency depreciation.
Currency Devaluation Impact
Revenues were negatively affected by currency devaluations, particularly in Nigeria due to the Naira devaluation in February 2024.
Gross Profit Challenges in Brazil and Mexico
Despite sequential TPV growth, gross profit in Brazil and Mexico declined due to market dynamics and payment mix shifts.
Company Guidance
During the DLocal fourth quarter 2024 earnings call, the company provided guidance that highlighted several key metrics. DLocal reported a total payment volume (TPV) increase of 45% year-over-year, reaching $26 billion, and a gross profit of $295 million with an adjusted EBITDA of $189 million, resulting in an EBITDA over gross profit margin of 64%. The company welcomed 194 new team members, expanding its workforce to 1,095 across 49 countries. DLocal launched 20 new payment methods for pay-ins and 7 for payouts, with close to 100 new partner integrations. The company achieved a TPV retention rate of over 140% and increased its Net Promoter Score (NPS) by 8 points. Looking ahead to 2025, DLocal aims to maintain strong TPV growth, with guidance suggesting continued high levels of revenue growth and the potential for operational leverage, while managing take rate compression and focusing on scale leadership.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.