A Fresh Look at DLocal (NasdaqGS:DLO) Valuation Following Strong Q3 Earnings Growth

DLocal (NasdaqGS:DLO) released its third quarter results, posting much higher sales and net income compared to the same period last year. This jump highlights continued growth and operational efficiency for the company, which has caught investor attention. See our latest analysis for DLocal. DLocal’s upbeat earnings have come at a time when the stock’s momentum has been notably mixed. While the 1-year total shareholder return sits at an impressive 20.92%, recent 30-day and 90-day share price returns of -15.9% and -13.54% reflect short-term volatility even amidst healthy business growth. This is a sign that the market is still digesting the company’s improved fundamentals and reassessing its potential. If you’re interested in spotting other fast-moving companies, now’s an ideal moment to broaden your investing horizon and discover fast growing stocks with high insider ownership With shares trading nearly 37% below analyst price targets and strong earnings growth, the key question is whether DLocal is now undervalued or if the stock has already baked in future gains. Could this be a buying opportunity? Most Popular Narrative: 93.5% Undervalued At $12.64, DLocal’s last close is dramatically below the narrative’s fair value calculation, suggesting an ambitious re-rating may be in store if these numbers hold up. This creates a striking contrast between current market sentiment and the conviction of the narrative by WynnLevi, setting up a pivotal discussion about DLocal's true worth. DLocal operates as a single operating segment, payment processing, offering a unified platform that supports complex cross-border and local-to-local transactions in emerging markets. 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 that are hard to replicate for new entrants. Read the complete narrative. Curious what makes this number possible? There’s a bold set of assumptions behind the fair value including rapid expansion, cutting-edge digital products, and world-class transaction capabilities in emerging markets. What makes this possible, and could it really drive the share price higher? Explore where the narrative points next to learn what’s fueling these projections. Result: Fair Value of $195.39 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, a delay in new product launches or the inability to maintain trust with enterprise clients could quickly challenge even the most bullish projections. Find out about the key risks to this DLocal narrative. Build Your Own DLocal Narrative If you see things differently or want to dig into the numbers yourself, you can put together your own DLocal narrative in just a few minutes. Do it your way. A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding DLocal. Looking for more investment ideas? Smart opportunities don’t wait around. Open the door to new gains with powerful ideas you can act on today, right from the Simply Wall Street Screener. Tap into rapid technological progress by reviewing these 25 AI penny stocks at the forefront of artificial intelligence adoption and innovation. Boost your earnings potential by targeting these 17 dividend stocks with yields > 3% that offer reliable income through strong dividend yields and solid financials. Jump ahead of market trends by tracking these 81 cryptocurrency and blockchain stocks poised to shape the future of digital assets and blockchain technology. 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.