DLocal (DLO), a fintech company based in Uruguay, saw its stock jump by over 31% in today’s trading. This came after investment firm HSBC upgraded the stock from Hold to Buy due to strong second-quarter results. Despite a few one-time factors, DLocal beat EBIT expectations and continued to show strong payment volumes. As a result, HSBC also raised its price target for the stock to $15, which DLO shares surpassed after today’s massive rally.
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Interestingly, HSBC’s analysts, led by Neha Agarwala, were encouraged by DLocal’s ability to control costs, even while investing in new staff and technology. Furthermore, they noted that the company’s launch of new and innovative products is helping it stand out in a crowded and highly commoditized industry. These positive developments, combined with better capital efficiency, led HSBC to believe that the company has strong long-term growth potential.
Therefore, HSBC also raised its earnings forecasts for the company. Indeed, it now expects DLocal’s earnings per share in 2025–2027 to be 6% to 9% higher than previously estimated, while net income projections for the same period are expected to be 4% to 9% higher. In addition, HSBC increased its 2025 gross profit estimate to $396 million, which is slightly above the middle of the company’s updated guidance.
Is DLO Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on DLO stock based on three Buys, five Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average DLO price target of $12.80 per share implies 16.5% downside risk.
