DLO - DLocal: Extremely Cheap But Extremely Risky

2024-07-25 23:35:38 ET

Summary

• DLocal's Q1 report showed incredibly poorly performing margins, leading the stock to lose a significant amount of its value.
• The underlying payment volumes have continued growing well.
• The take rate is a major risk for DLocal in addition to issues in Argentina, which investors should note especially in the short term with DLocal expecting sequential improvements.
• The stock is now valued even cheaper, being significantly undervalued unless the risks persist at a higher level than I anticipate as a base scenario.

DLocal Limited ( DLO ), the payment processor focused on emerging markets, has reported continued payment volume growth but increasingly weak margins, especially leaving investors pessimistic after the Q1 report that showed thinning results....

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