DLocal (DLO – Research Report), the Technology sector company, was revisited by a Wall Street analyst yesterday. Analyst Cassie Chan from Bank of America Securities reiterated a Hold rating on the stock and has a $12.00 price target.
Cassie Chan has given her Hold rating due to a combination of factors affecting DLocal’s financial outlook. The company’s shares have experienced a significant decline following a mixed fourth-quarter performance, which included a lower gross profit take rate and conservative guidance for 2025. This cautious outlook is partly due to the company’s withdrawal from its medium-term guidance, citing volatility in emerging markets and pressure on take rates as it expands with high-volume, low-margin Tier 0 merchants.
Despite DLocal’s robust business model, Chan identifies potential risks such as margin compression and a slowdown in revenue growth, which justify maintaining a Neutral stance. While the company’s projected revenue growth for 2025 surpasses expectations, driven by strong total payment volume growth, the anticipated gross profit and adjusted EBITDA figures fall short of market expectations, reflecting further deceleration. These elements contribute to Chan’s decision to reiterate a Hold rating on DLocal’s stock.
In another report released today, Morgan Stanley also downgraded the stock to a Hold with a $10.00 price target.
DLO’s price has also changed dramatically for the past six months – from $8.670 to $13.750, which is a 58.59% increase.