We came across a bullish thesis on DLocal Limited (DLO) on Substack by Oliver | MMMT Wealth. In this article, we will summarize the bulls’ thesis on DLO. DLocal Limited (DLO)'s share was trading at $9.74 as of March 5^th. DLO’s trailing and forward P/E were 24.97 and 17.36 respectively according to Yahoo Finance.

DLocal (DLO) has faced recent underperformance, but its long-term growth potential remains intact. As a fintech company focused on emerging markets, it provides global merchants with a streamlined solution for navigating complex regulatory and operational landscapes. Unlike payment providers such as Stripe and Adyen, which cater primarily to developed markets, DLO specializes in regions where compliance and infrastructure challenges make in-house payment solutions costly and inefficient. This unique positioning allows the company to serve businesses looking to expand into high-growth markets without taking on the burdens of local compliance.

With revenue growth of 8.8%, a net income margin of 14.5%, and an EV/Sales multiple of 2.3x, DLO remains attractively valued. Long-term macroeconomic trends, including the increasing digitalization of emerging economies, support its outlook, with cross-border payments projected to exceed $65 trillion by 2030. After a volatile 18 months, the company is showing signs of stabilization, driven by improving take rates, greater transaction volume diversification, and reaccelerating total payment volume (TPV). As digital payments continue to expand in emerging markets, DLO is positioned to capture a meaningful share of this growth. Despite near-term challenges, it presents a long-term investment opportunity with significant upside potential.

DLocal Limited (DLO) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 19 hedge fund portfolios held DLO at the end of the fourth quarter which was 21 in the previous quarter. While we acknowledge the risk and potential of DLO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than DLO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.