DLocal Shows Impressive Growth But Faces Margin and Regional Concerns
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DLocal has a strong business model and impressive growth, especially in Latin America, but faces potential headwinds like declining gross profit margins and mixed performance across regions.
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Total payment volume (TPV) has grown rapidly, indicating merchant satisfaction and business scale, but processing costs as a percentage of TPV are increasing.
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Net revenue retention rate remains high at 165%, showing good merchant retention, but new merchant addition revenue is declining.
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Back-of-the-envelope valuation suggests significant upside potential, but risks warrant a more conservative expected return target of 25% rather than 38%.
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DLocal is a "Buy" with strong long-term potential, but investors should monitor key metrics like margins and regional growth closely.