Key Takeaways
- DLocal has achieved compound annual growth rates of 60% in total payment volume and 42% in revenues since its IPO in 2021, expanding operations to 43 countries.
- Despite robust growth, DLocal trades at a forward earnings multiple of 19.25, modest relative to its 27% projected revenue growth in 2026.
- Operational efficiencies persist, with a stable 1.2% net take rate and net revenue retention around 113%, supporting long-term margin resilience.
- Compared to PayPal, whose growth is tapering, DLocal’s emerging-market positioning may offer stronger upside, albeit with increased geopolitical and currency risks.
- Upcoming Q2 2025 results could prove pivotal in affirming DLocal’s trajectory and investor confidence in its expansion narrative.
In the fintech sector, where growth trajectories often dictate valuations, DLocal Limited stands out with its robust expansion in payment volumes and revenues since going public in 2021, achieving compound annual growth rates of around 60% in total payment volume and 42% in revenues while broadening its footprint from 29 to 43 countries. This performance underscores a compelling case for investors eyeing high-growth opportunities in emerging markets, particularly when juxtaposed against its forward earnings multiple of 19.25, which ranks among the lowest in the mainstream fintech arena, trailing only PayPal Holdings at 13.83 times forward earnings.
Growth Metrics That Defy Market Headwinds
DLocal’s trajectory since its 2021 IPO illustrates a fintech model finely tuned to the nuances of emerging economies. The company’s total payment volume (TPV) has surged at a compounded annual rate of approximately 60%, reflecting not just increased transaction activity but also strategic penetration into high-potential regions across Latin America, Africa, and Asia. Revenues have followed suit, compounding at 42% annually, driven by a mix of cross-border payment solutions and local processing capabilities that cater to global merchants seeking seamless entry into fragmented markets.
This growth narrative gained further momentum in recent quarters. According to DLocal’s fourth-quarter 2024 financial results, as reported via GlobeNewswire on 27 February 2025, TPV climbed 45% year-over-year to $25.6 billion for the full year, with revenues advancing 15% to $746 million. Such figures highlight operational resilience amid currency fluctuations and regulatory shifts in emerging markets. Analysts project this momentum to persist, with consensus estimates pointing to 27% revenue growth in 2026—the highest among established fintech players—fuelled by ongoing geographic expansion and diversification into new verticals like e-commerce and ride-hailing.
Yet, this expansion is not without its ironies. While DLocal’s net revenue retention has hovered around 113% in recent periods, indicating strong customer stickiness, the company’s ability to scale without proportional cost inflation has led to expanding operating leverage. For instance, gross profit margins have stabilised, with the net take rate holding steady at 1.2% since early 2024, as per the third-quarter 2024 earnings release from DLocal Limited. This efficiency positions DLocal to capitalise on the projected surge in digital payments in emerging markets, where the World Bank estimates transaction volumes could double by 2030.
Valuation Disparities in Focus
When benchmarked against peers, DLocal’s valuation appears anomalously modest. Trading at 19.25 times forward earnings as of 11 August 2025, based on Nasdaq real-time data, the stock reflects a price-to-earnings ratio that belies its growth prospects. For context, this multiple is derived from expected earnings per share of $0.57, a figure that incorporates analyst models forecasting sustained double-digit revenue increases through 2026.
A stark comparison emerges with PayPal Holdings, another fintech stalwart but one operating in more mature markets. PayPal’s forward P/E stands at 13.83, underpinned by anticipated EPS of $4.89, yet its revenue growth is forecasted at a more tempered 6–8% annually. Live ticker data as of 11 August 2025 shows PayPal’s shares at $67.65, down 0.84% from the previous close, reflecting broader market caution around its transition from high-growth phases. Recent earnings from PayPal, including a Q2 2025 report highlighting 5% revenue growth to $8.29 billion and a 13% rise in operating income to $1.64 billion, as detailed in Trading News analyses, demonstrate margin improvements but lack the explosive top-line potential of DLocal.
This disparity raises questions about market pricing efficiency. DLocal’s premium growth—27% projected for 2026 versus PayPal’s mid-single digits—comes at a multiple only marginally higher, suggesting potential undervaluation. Analyst sentiment, as aggregated by sources like TipRanks, rates DLocal at 2.4 (Buy) and PayPal at 2.3 (Buy), yet the former’s upside appears more pronounced given its emerging market leverage. Seeking Alpha contributors have echoed this, labelling DLocal a “great bet on emerging markets and fintech” in articles dated around two weeks prior to 11 August 2025, citing its profitability flywheel and expansion ambitions.
Key Valuation Metrics Comparison
| Metric | DLocal (DLO) | PayPal (PYPL) |
|---|---|---|
| Forward P/E | 19.25 | 13.83 |
| Expected 2026 Revenue Growth | 27% | 6–8% |
| Market Cap (as of 11 Aug 2025) | $3.13B | $64.63B |
| Price/Book | 5.75 | 3.21 |
| EPS (Forward) | $0.57 | $4.89 |
The table above, compiled from live ticker data and analyst consensus as of 11 August 2025, illustrates how DLocal’s metrics offer a growth-at-a-reasonable-price proposition. Its higher price-to-book ratio of 5.75 versus PayPal’s 3.21 reflects market recognition of intangible assets like network effects in underserved regions, yet the overall valuation gap hints at asymmetry for patient investors.
Implications for Fintech Investors
For those navigating the fintech landscape, DLocal’s profile embodies the allure of emerging market plays: high growth potential tempered by volatility risks such as forex exposure and geopolitical uncertainties. The company’s expansion to 43 countries by 2025, up from 29 in 2021, mitigates some of these through diversification, but investors must weigh this against PayPal’s more predictable, albeit slower, cash flow generation.
Looking ahead, DLocal’s Q2 2025 earnings, slated for release on 13 August 2025 as announced by Morningstar, could serve as a litmus test. Consensus models anticipate continued TPV acceleration, potentially validating the 27% revenue growth forecast for 2026. In contrast, PayPal’s next report on 28 October 2025 may reinforce its margin-focused turnaround, but without commensurate top-line vigour.
Ultimately, the fintech sector’s bifurcation—between high-flyers in nascent markets and established names in saturated ones—presents opportunities for discerning allocation. DLocal’s blend of aggressive expansion and restrained valuation, especially relative to PayPal, suggests it could reward those betting on the next wave of global digital commerce, provided execution remains sharp in an increasingly competitive arena.
References
- DLocal Limited. (2024). Second Quarter 2024 Financial Results. https://dlocal.gcs-web.com/news-releases/news-release-details/dlocal-reports-2024-second-quarter-financial-results/
- DLocal Limited. (2024). Third Quarter 2024 Financial Results. https://dlocal.gcs-web.com/news-releases/news-release-details/dlocal-reports-2024-third-quarter-financial-results
- DLocal Limited. (2025, February 27). Fourth Quarter 2024 Financial Results. https://www.globenewswire.com/news-release/2025/02/27/3034284/0/en/dLocal-Reports-2024-Fourth-Quarter-Financial-Results.html
- Girolino. (2024). DLocal Q2 2024 Earnings Review. https://www.girolino.com/dlocal-q2-2024-earnings-review-navigating-growth-and-challenges-in-emerging-markets/
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- PitchBook. (2024). DLocal Company Profile. https://pitchbook.com/profiles/company/171635-23
- Trading News. (2025). PayPal Stock Q2 Surge Unlocks Value. https://tradingnews.com/news/paypls-nasdsaq-pypl-stock-q2-surge-unlick-value-as-margins-widen
- TipRanks. (2025). PayPal Earnings Estimates and Ratings. https://tipranks.com/stocks/pypl/earnings
- Seeking Alpha. (2025). DLocal: Great Bet on Emerging Markets and Fintech. https://seekingalpha.com/article/4805029-dlocal-stock-great-bet-on-emerging-markets-and-fintech
- AINVEST. (2025). DLocal Q2 2025 Results Announcement. https://www.ainvest.com/news/dlocal-limited-release-q2-2025-financial-results-august-13-2025-2507/
- Morningstar. (2025). DLocal to Report Q2 2025 Results. https://www.morningstar.com/news/globe-newswire/9494224/dlocal-to-report-second-quarter-2025-financial-results
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