DLocal (NASDAQ:DLO) Valuation in Focus as Investors Spotlight Growth and Scale Potential

Recent commentary around DLocal (NASDAQ:DLO) highlights its status as a favored small-cap pick among retail investors. This attention is driven by expanding payment volumes, strong management, and a large, growing addressable market. While growth continues, profitability remains under scrutiny as costs have increased with investments in scale.

See our latest analysis for DLocal.

DLocal’s share price has demonstrated solid momentum this year, with a 15% return year-to-date and a total shareholder return of 23% over the past twelve months. While the latest payment volume growth and attention from investors have helped fuel interest, the market remains focused on whether the company’s investment in scale can translate to sustainable profitability and further gains for long-term holders.

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But with shares already up this year and trading at a discount to analyst price targets, the real question is whether DLocal is still undervalued or if the market has already priced in its future growth potential. Is there still a buying opportunity?

Most Popular Narrative: 93% Undervalued

With DLocal’s last close at $13.44 and a narrative fair value positioned dramatically higher, expectations are rising for a meaningful re-rating if bold growth assumptions materialize.

The company’s core moat derives from deep integration with local payment methods in emerging markets, especially in Latin America, Africa, and Asia. Regulatory expertise and on-the-ground relationships are difficult to replicate for new entrants. The company also has the ability to serve both pay-in and pay-out transactions for global merchants, creating high switching costs for enterprise customers.

Read the complete narrative.

What is fueling such a significant valuation gap? The answer lies in ambitious projections about revenue growth, margins, and the type of profit multiples typically associated with a market leader. Interested in the key financial assumptions driving this notable fair value? Explore the narrative and review the numbers directly.

Result: Fair Value of $195.39 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, delays in launching new products or issues with third-party technology partners could challenge DLocal’s ambitious growth narrative.

Find out about the key risks to this DLocal narrative.

Another View: What Do Market Multiples Say?

Looking at DLocal through the lens of its price-to-earnings ratio, the narrative changes. Shares trade at 23.2 times earnings, which is considerably higher than the US Diversified Financial industry average of 14 times. Compared with peers at 61.4 times, DLocal appears more affordable; however, its current valuation is above the fair ratio of 21.9 times.

This difference indicates some valuation risk because the market is already pricing in substantial growth. The question remains whether this premium can be justified or if expectations will need to be revised.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own DLocal Narrative

If you want to examine the data from a different angle or dive deeper on your own terms, crafting your personal outlook is quick and simple, typically taking under 3 minutes. Do it your way

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding DLocal.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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