DLocal (DLO) AI Stock Analysis

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DLocal

(NASDAQ:DLO)

74Outperform

DLocal's strong financial performance, particularly in revenue growth and strategic initiatives highlighted in the earnings call, supports a positive outlook. While technical indicators suggest caution with bearish trends, the company's valuation remains reasonable. Strategic challenges like take rate compression and currency impacts are noteworthy but are being addressed by the company's focus on expansion and innovation.

Positive Factors

Earnings Estimates

The EPS growth is expected to increase by 36% in 2025, signaling future profitability improvements.

Geographical Expansion

Egypt, Africa, and smaller Latam countries are expected to drive major TPV growth and enhance gross profit contribution.

Revenue Growth

2025 revenue growth guidance of 25%-35% is ahead of analyst expectations, indicating potential strong performance.

Negative Factors

Market Volatility

DLocal has backed away from its medium-term guidance due to volatility in emerging markets.

Operational Challenges

Operations in Brazil are facing challenges due to lower TPV growth and increased competition.

Profit Margins

Ongoing take rate compression and higher expenses are leading to margin pressures for DLocal.

DLocal (DLO) vs. S&P 500 (SPY)

Market Cap

$2.48B

Dividend YieldN/A

Average Volume (3M)767.34K

Price to Earnings (P/E)19.2

Beta (1Y)0.60

Revenue Growth33.84%

EPS Growth0.29%

CountryUS

Employees1,095

SectorTechnology

Sector Strength44

IndustrySoftware - Infrastructure

Share Statistics

EPS (TTM)0.45

Shares Outstanding150,763,440

10 Day Avg. Volume524,601

30 Day Avg. Volume767,336

Financial Highlights & Ratios

PEG Ratio66.65

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

$12.57

Price Target Upside44.65% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering7

DLocal Business Overview & Revenue Model

Company DescriptionDLocal (DLO) is a technology company that specializes in cross-border payment solutions focused on emerging markets. The company operates in the financial technology sector, providing a platform that enables global merchants to accept payments, send payouts, and settle funds in local currencies. DLocal's core services are aimed at simplifying the complexities of international transactions in regions where traditional banking infrastructure may be underdeveloped.

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

Very Positive

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.

Balance Sheet

Positive

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.

Cash Flow

Positive

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.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
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

Technical Analysis Sentiment

Neutral

Last Price8.69

Price Trends

50DMA

9.99

Negative

100DMA

10.93

Negative

200DMA

9.71

Negative

Market Momentum

MACD

-0.27

Negative

RSI

49.18

Neutral

STOCH

71.76

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DLO, the sentiment is Neutral. The current price of 8.69 is above the 20-day moving average (MA) of 8.61, below the 50-day MA of 9.99, and below the 200-day MA of 9.71, indicating a neutral trend. The MACD of -0.27 indicates Negative momentum. The RSI at 49.18 is Neutral, neither overbought nor oversold. The STOCH value of 71.76 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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
PAGS	81 Outperform	$2.79B	6.82	15.39%	―	8.26%	20.41%
PAYO	74 Outperform	$2.23B	19.12	17.45%	―	17.64%	30.75%
DLO	74 Outperform	$2.48B	19.24	26.10%	―	33.84%	0.29%
STNE	63 Neutral	$3.31B	8.73	-9.48%	―	-8.52%	-180.71%
TUYA	63 Neutral	$1.25B	222.35	0.51%	3.12%	29.84%	―
DOCN	61 Neutral	$2.38B	29.80	-41.63%	―	12.66%	2097.85%
Sector *	58 Neutral	$9.99B	10.12	-6.46%	3.10%	7.47%	-11.60%

* Technology Sector Average

Performance Comparison

DLO

DLocal

8.93

-5.60

-38.54%

PAGS

Pagseguro Digital

9.35

-2.50

-21.10%

STNE

Stoneco

13.12

-2.66

-16.86%

PAYO

Payoneer

6.29

1.12

21.66%

TUYA

Tuya

1.99

0.35

21.34%

DOCN

DigitalOcean Holdings

26.68

-6.03

-18.43%

DLocal Earnings Call Summary

Earnings Call Date: Feb 27, 2025 | % Change Since: -36.80% | Next Earnings Date: May 14, 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.