Last Update 16 May 26

DLO: Future Upside Will Follow Share Buybacks And Expanding Cross Border Flows

Analysts have lowered their average price target on DLocal by $1, reflecting slightly softer revenue growth assumptions, a modestly lower future P/E multiple, and updated views from recent research that fine-tune expectations ahead of upcoming earnings.

Analyst Commentary

Bullish Takeaways

Bullish analysts who recently raised their price targets are signaling confidence that DLocal can execute on its growth plans, even as models are adjusted ahead of earnings.
The willingness of some bullish analysts to fine tune assumptions, rather than make wholesale changes, suggests they still see the current valuation as reasonable relative to the company’s long term opportunity.
Incremental target increases indicate that, for these analysts, the near term earnings setup is not seen as a major headwind to the stock’s longer term growth narrative.
Maintaining positive ratings while updating models implies that, in their view, any short term volatility around earnings does not fully derail the potential for attractive risk reward.

Bearish Takeaways

Bearish analysts have trimmed price targets, pointing to softer revenue assumptions that feed directly into more conservative growth and earnings expectations.
The reduction in assumed future P/E multiples reflects concern that investors may be less willing to pay as high a premium for DLocal without clearer evidence of consistent execution.
Lowered targets ahead of earnings show that some analysts prefer to reset expectations now, rather than risk models that rely on more aggressive revenue or margin outcomes.
These cautious moves underline that, while the stock still has supporters, not all analysts are comfortable with previous valuation levels given updated views on the company’s near term performance.

What's in the News

DLocal announced a share repurchase program of up to US$300 million in class A common shares. The plan is set to run until March 19, 2027, or until the full authorization is used (company announcement).
The Board of Directors authorized the buyback plan on March 13, 2026, setting the framework for the repurchase program (company announcement).
From March 13, 2026, to March 31, 2026, DLocal repurchased 801,907 shares, about 0.27% of shares, for US$10.12 million under the recently announced buyback program, completing this tranche (company filing).
DLocal provided earnings guidance for full year 2026, indicating an expected operating profit change of 27.5% to 32.5% year over year (company guidance).
DLocal announced a partnership with Stable Sea to support low-cost, high-speed, stablecoin-powered B2B international payments, using DLocal’s local payment rails across more than 40 countries (company partnership announcement).

Valuation Changes

Fair Value: Model fair value remains at $17.65, with no change from the prior estimate.
Discount Rate: The discount rate has fallen slightly from 8.85% to about 8.79%, indicating a modest adjustment in the required return used in the model.
Revenue Growth: The assumed revenue growth rate has been trimmed slightly from about 28.03% to about 26.97%.
Net Profit Margin: The assumed net profit margin has risen slightly from about 16.79% to about 17.22%.
Future P/E: The assumed future P/E multiple has fallen slightly from about 19.19x to about 18.45x.

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Key Takeaways

Ongoing product innovation and payment infrastructure investments enable revenue growth, higher margins, and operational efficiency amid accelerating digitization in emerging markets.
Geographic and merchant diversification, along with stronger relationships with multinational clients, reduces revenue concentration risk and supports more stable, recurring income.
Heavy reliance on top clients, regulatory challenges, declining take rates, disruptive payment technologies, and rising competition all threaten growth, margins, and long-term stability.

Catalysts

About DLocal

Operates a payment processing platform worldwide.What are the underlying business or industry changes driving this perspective?

dLocal's rapid expansion of its solution set (SmartPix for Pix, Buy Now Pay Later partnerships, stablecoin payment infrastructure) and continued onboarding of new alternative payment methods position it to benefit from accelerating digitization of payments in emerging markets, supporting sustained top-line growth and potential for higher take rates on new products-positive for revenue and gross margin.
Broad-based TPV and revenue growth across multiple geographies (notably outside of Brazil and Mexico), alongside increased geographic and merchant diversification (top three markets now less than 50% of revenues), reduces over-dependence on key regions and supports more stable, resilient revenue streams, helping to structurally improve net margins.
Deepening relationships with large multinational merchants-evidenced by increased country and payment method coverage per merchant and rising share of wallet-indicate significant runway for incremental, high-margin recurring revenues as emerging market e-commerce penetration climbs, improving both revenue visibility and operating leverage.
Strategic investments in localized payment infrastructure, technology, and automation (including AI), even as headcount rises, have led to improved operational efficiencies and five consecutive quarters of EBITDA/gross profit ratio improvement; this operational leverage is likely to support further expansion in net margins and earnings as scale increases.
Progress in acquiring new licenses (UAE, Turkey, Philippines) and product innovation (e.g., stablecoin on/off-ramp solutions and offline payment capabilities) will enable access to new verticals and underpenetrated regions, capturing more of the large addressable emerging-market payments opportunity and driving long-term revenue and earnings growth.

DLocal Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming DLocal's revenue will grow by 27.0% annually over the next 3 years.
Analysts assume that profit margins will increase from 15.8% today to 17.2% in 3 years time.
Analysts expect earnings to reach $427.3 million (and earnings per share of $1.16) by about May 2029, up from $192.1 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $500.6 million in earnings, and the most bearish expecting $369.2 million.
In order for the above numbers to justify the price target of the analysts, the company would need to trade at a PE ratio of 18.5x on those 2029 earnings, up from 16.9x today. This future PE is greater than the current PE for the US Diversified Financial industry at 16.9x.
Analysts expect the number of shares outstanding to grow by 5.01% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.79%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

Heavy revenue concentration among a small group of global merchants, particularly the top 20, exposes dLocal to customer churn risk and limits revenue diversification, making long-term revenue and earnings growth vulnerable if any major clients scale back or leave.
Increased global regulatory scrutiny (such as heightened tariffs in Mexico, shifting fiscal regimes in Brazil, evolving capital controls, and potential digital taxes) and frequent currency devaluations in key emerging markets (e.g., Argentina) could raise compliance and operational costs, compressing net margins and adding ongoing earnings volatility.
The general industry trend of decreasing take rates-driven by both merchant pricing pressure and competition-poses a structural risk to sustained gross profit growth, as confirmed by dLocal's own expectation for gradual, ongoing take rate erosion over the long term.
The emergence and adoption of stablecoins and real-time payments could disrupt dLocal's fee-based intermediary business model over time, especially if merchants and consumers increasingly bypass existing payment facilitators, pressuring future revenues; notwithstanding dLocal's positioning as an on/off ramp, this technology shift remains a material long-term threat.
Intensifying competition from both multinational tech giants (who may insource local payment infrastructure) and agile regional fintechs may erode dLocal's competitive advantage, leading to greater customer attrition and reduced pricing power, ultimately impacting both revenue growth and net earnings.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $17.65 for DLocal based on their expectations of its future earnings growth, profit margins and other risk factors.
However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $21.0, and the most bearish reporting a price target of just $14.5.
In order for you to agree with the analysts, you'd need to believe that by 2029, revenues will be $2.5 billion, earnings will come to $427.3 million, and it would be trading on a PE ratio of 18.5x, assuming you use a discount rate of 8.8%.
Given the current share price of $11.01, the analyst price target of $17.65 is 37.6% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Confidence Will Strengthen As Digital Payment Momentum Grows In Emerging Markets