The payments sector in emerging markets has been a focal point for investors seeking growth beyond saturated developed economies, and DLocal Limited (NASDAQ: DLO) stands out as a compelling case. The sharpest insight here is that while DLocal’s projected earnings growth for 2025 through 2027 appears robust at first glance, the sustainability of this trajectory and its current valuation warrant a more critical examination. With a business model centred on facilitating cross-border payments for global enterprises in regions like Latin America, Africa, and Asia, the company has carved a niche, but external pressures and operational risks could temper optimism.
Earnings Growth Projections: A Promising Yet Uncertain Path
Analyst consensus, aggregated from trusted financial data providers, suggests that DLocal is poised for significant earnings growth over the next few years. For 2025, earnings per share (EPS) are forecasted to increase by approximately 55% compared to 2024 estimates, followed by a 30% rise in 2026, and a further 27% in 2027. These figures, derived from recent Bloomberg, FactSet, and Yahoo Finance data, reflect confidence in DLocal’s ability to capitalise on the expanding digital payments landscape in emerging markets. The company’s latest reported full-year results for 2024 (released in February 2025) already showed a 15% year-over-year revenue increase to US$746 million, alongside a 45% surge in total payment volume to US$25.6 billion, providing a solid base for these projections.
However, such aggressive growth assumptions must be contextualised. Emerging markets, while offering high growth potential, are notoriously volatile. Currency fluctuations, regulatory changes, and geopolitical instability can erode profitability overnight. DLocal’s heavy reliance on key markets like Brazil and India exposes it to these risks, and any slowdown in transaction volumes could disrupt the projected EPS growth. Moreover, competition from global players like PayPal and regional fintechs is intensifying, potentially squeezing margins over the 2025–2027 period.
Valuation: Attractive Multiple or Hidden Risks?
On the valuation front, DLocal’s stock is currently trading at roughly 10 times forward earnings for 2027, based on consensus estimates. This multiple appears modest compared to peers in the fintech and payments sector, where price-to-earnings ratios often hover between 20 and 30 for high-growth names. At first glance, this suggests the market may be undervaluing DLocal’s growth potential, a sentiment echoed in some corners of financial discussions on platforms like X, where analysts like Rose Celine Investments have noted the stock’s apparent attractiveness. Yet, a deeper dive reveals reasons for caution.
A forward P/E of 10 for 2027 assumes that earnings growth materialises as forecasted. If growth falters due to macroeconomic headwinds or operational missteps, this multiple could quickly look less appealing. Additionally, DLocal’s current market capitalisation reflects a cautious stance from investors, with an average analyst price target of US$12.45 as of July 2025, implying limited upside from recent trading levels. The consensus rating of “Hold” from eight brokerages, with five holding a neutral view and three advocating a buy, further signals tempered enthusiasm.
Recent Performance as a Growth Indicator
Examining DLocal’s recent financials provides a clearer picture of its growth trajectory. The full-year 2024 results, covering January to December, highlighted a net revenue retention rate of 113%, indicating strong customer loyalty and recurring business. This metric is critical for a payments platform, as it reflects the ability to expand within existing client relationships, a key driver of future earnings. However, the revenue growth rate of 15% for 2024, while respectable, is notably slower than the payment volume growth of 45%, suggesting potential pressure on transaction fees or take rates.
Looking ahead, the upcoming Q2 2025 results, scheduled for release on 13 August 2025, will offer further insight into whether DLocal can maintain its momentum. Analysts will likely scrutinise whether revenue growth accelerates in the April to June period, particularly as global enterprises continue to expand their footprint in emerging markets.
Comparative Context: Sector and Historical Benchmarks
To place DLocal’s performance and valuation in context, a comparison with historical data and sector peers is instructive. In 2023, DLocal reported revenue growth of 59% year-over-year, significantly outpacing the 15% recorded in 2024. This slowdown, while partly attributable to tougher comparables, raises questions about whether the company can return to higher growth rates in 2025 and beyond. Compared to a peer like Adyen, which operates in both developed and emerging markets, DLocal’s narrower geographic focus offers higher growth potential but also greater risk concentration.
The table below summarises key metrics for DLocal based on 2024 reported figures and 2025–2027 projections:
| Metric | 2024 (Reported) | 2025 (Forecast) | 2026 (Forecast) | 2027 (Forecast) |
|---|---|---|---|---|
| Revenue Growth (YoY) | 15% | 20% | 18% | 15% |
| EPS Growth (YoY) | N/A | 55% | 30% | 27% |
| Forward P/E Ratio | N/A | 15.5 | 12.0 | 10.0 |
Note: Forecasts are based on consensus estimates from Bloomberg, FactSet, and Yahoo Finance as of July 2025.
Conclusion: Balancing Optimism with Prudence
DLocal presents a fascinating opportunity for investors, with strong earnings growth projections and a seemingly attractive valuation. However, the risks inherent in its operating environment and the potential for competitive pressures cannot be ignored. While the market may indeed be pricing the stock conservatively, this could reflect legitimate concerns rather than an overlooked bargain. Investors would be wise to monitor upcoming quarterly results and broader economic trends in emerging markets before drawing firm conclusions. For now, DLocal remains a name to watch, but not without a healthy dose of scepticism.
References
- dLocal. (2025, February 27). dLocal Reports 2024 Fourth Quarter Financial Results. GlobeNewswire. Retrieved from https://www.globenewswire.com/news-release/2025/02/27/3034284/0/en/dLocal-Reports-2024-Fourth-Quarter-Financial-Results.html
- dLocal. (2025, July 14). dLocal to Report Second Quarter 2025 Financial Results. GlobeNewswire. Retrieved from https://www.globenewswire.com/news-release/2025/07/14/3115173/0/en/dLocal-to-Report-Second-Quarter-2025-Financial-Results.html
- Defense World. (2025, July 20). DLocal Limited (NASDAQ:DLO) Receives $12.45 Consensus PT from Analysts. Retrieved from https://defenseworld.net/2025/07/20/dlocal-limited-nasdaqdlo-receives-12-45-consensus-pt-from-analysts.html
- Finviz. (2025). DLO Dlocal Limited Stock Quote. Retrieved July 2025, from https://finviz.com/quote.ashx?t=DLO
- GuruFocus. (2025, July 14). dLocal Ltd (DLO) Announces Upcoming Q2 2025 Financial Results Release. Retrieved from https://www.gurufocus.com/news/2976295/dlocal-ltd-dlo-announces-upcoming-q2-2025-financial-results-release-dlo-stock-news
- Morningstar. (2025). dLocal Ltd DLO. Retrieved July 2025, from https://www.morningstar.com/stocks/xnas/dlo/quote
- Quiver Quant. (2025, July 14). dLocal Limited to Release Q2 Financial Results on August 13, 2025. Retrieved from https://www.quiverquant.com/news/dLocal+Limited+to+Release+Q2+Financial+Results+on+August+13%2C+2025
- Rose Celine [@realroseceline]. (2025). [Posts on DLO analysis and valuation]. X. Retrieved from https://x.com/realroseceline/status/1940795079809290652, https://x.com/realroseceline/status/1936208742728806428, https://x.com/realroseceline/status/1915866733048697254, https://x.com/realroseceline/status/1915807799898214918, https://x.com/realroseceline/status/1876059984997552585
- Seeking Alpha. (2025). DLO Stock Price and Forecast. Retrieved July 2025, from https://seekingalpha.com/symbol/DLO
- Stock Titan. (2025, July 14). dLocal to Report Second Quarter 2025 Financial Results on August 13, 2025. Retrieved from https://www.stocktitan.net/news/DLO/d-local-to-report-second-quarter-2025-financial-r7ql5dviassn.html
- Yahoo Finance. (2025). DLocal Limited (DLO) Stock Price, News, Quote & History. Retrieved July 2025, from https://finance.yahoo.com/quote/DLO/analysis
