| Pillar | Previous | Current | Delta | Reason |
|---|---|---|---|---|
| Business Quality | 85 | 85 | = | No change. FY2025 confirmed: TPV $40.8B, revenue $1.09B, NRR 162% in Q4. Exceptional fundamentals unchanged. |
| Valuation | 80 | 78 | -2 | Q4 gross margin 34.3% (below prior estimate ~38%). Take rate compression from volume discounting marginally increases discount needed in valuation model. |
| Entry/Exit Timing | 62 | 55 | -7 | CRITICAL CORRECTION: Prior 17:00 calibration estimated intraday RSI ~38 during selloff. Actual Apr 2 close RSI = 54.54. Apr 6 RSI ~50-52 — not oversold. Technical entry rule (RSI < 40) is NOT MET. |
| Underlying Driver | 80 | 78 | -2 | Tariff/trade war escalation adds EM risk premium. DLO's EM markets face currency pressure and potential trade disruption beyond prior estimate. |
Sector Profile: Emerging Markets Payments (High-Growth Stage 2) — Primary metrics: TPV growth, NRR, take rate, FCF conversion, geographic diversification, operating leverage. Benchmarks: TPV growth >40% strong, NRR >130% elite, FCF conversion >50%.
| Sub-Signal | Raw Data | Sector Context | Score | Rationale |
|---|---|---|---|---|
| TPV Growth | FY2025: $40.8B (+70% YoY est.) Q4 2025: $13.1B (+70% YoY) Q3 2025: $10.4B (+59% YoY) |
EM Payments: >40% = strong; >60% = exceptional | 95 | Exceptional — accelerating through FY2025. Q4 70% YoY growth is top 5% globally for payments companies of this scale. TPV growth re-accelerating is the #1 quality signal. |
| Revenue Growth | FY2025: $1.09B (+46% YoY est.) Q4 2025: $337.9M (+65% YoY) Crossed $1B milestone FY2025 |
High-growth fintech median: 25-40% | 90 | Revenue accelerating even faster than TPV in Q4 (65% vs 70%) — take rate holding better than feared. $1B revenue milestone crossed. Broad-based geographic growth. |
| Net Dollar Retention (NRR) | Q4 2025: 162% FY2025: 145% Q3 2025: 149% |
Elite benchmark: >130% · Q4 2024 NRR was 106% | 95 | Outstanding — merchants spending 62% more YoY. NRR exploded from 106% to 162% in 4 quarters. This is the single strongest metric in the entire analysis — existing merchants are deeply expanding usage. |
| Gross Margin / Take Rate | GM: 34.3% (Q4) ↓ from ~41% (Q4 2024) Take rate: ~0.99% (Q4) ↓ from ~1.2% |
Payment processors: 35-55%; EM discount expected | 55 | Most concerning metric in the report. GM declined 7 percentage points YoY from volume discounting for large merchants. Take rate compression is a structural risk if it continues. FCF mitigates concern but trend requires monitoring. |
| Cash Generation / FCF | Adj FCF: $190.7M (+110% YoY) FCF conversion: ~97% Net cash: $658M ($2.23/share) |
FCF conversion >50% = benchmark; 97% = exceptional | 92 | Nearly 1:1 FCF-to-earnings conversion. FCF growing at 2x the rate of revenue — operating leverage manifesting in cash terms. $658M net cash provides fortress balance sheet. |
| Geographic Diversification | 40+ countries · Est. Brazil/Mexico ~50-60% of TPV Expanding: UAE, Turkey, Philippines |
Concentration risk: <50% single country | 62 | Brazil and Mexico likely still 50-60%+ of TPV — concentration risk remains. Positive: active diversification into MENA and Asia-Pacific. Geography expansion is a long-term quality driver. |
| Component | Score | Detail |
|---|---|---|
| ROIC / ROE (40%) | 85 | ROE ~35%, ROIC ~24-35% (top quartile vs EM fintech peers). Stable and rising. Capital-light model = inherently high ROIC. Every dollar of incremental revenue generates significant incremental profit given fixed infrastructure costs. |
| Capital Allocation (30%) | 75 | Initiated $0.1939/share dividend + $300M buyback. Reinvesting in geographic expansion (UAE, Turkey, Philippines). CEO Pedro Arnt (ex-MercadoLibre CFO) knows EM payments infrastructure deeply — high-confidence capital allocation decisions. |
| Management Quality (30%) | 75 | Pedro Arnt hire from MercadoLibre is a major credibility signal — he helped scale the dominant LatAm digital platform. SBC only ~2% of revenue (exceptionally low for tech). Track record of beating guidance throughout FY2025. |
| Multiple | Current | Sector Median | Context | Score |
|---|---|---|---|---|
| Forward P/E | ~17-18x ($12.75 / ~$0.72 fwd EPS est.) | High-growth EM fintech: 25-40x | PEG = 0.27-0.28x (extraordinarily cheap for 65% revenue growth). Q4 EPS $0.18 = $0.72 annualised. | 90 |
| EV/Revenue | ~2.7x ($3.57B EV / $1.09B FY2025 rev) | EM payments peers: 5-10x | Revenue growing 65% and trading at 2.7x revenue. EM discount justified but not this large. EV/Rev/Growth = 0.04x — extreme value. | 88 |
| FCF Yield | 6.1% ($190.7M FCF / $3.14B EV) | Top quintile: >5% | Getting paid 6.1% in FCF yield to own a 65% growth business. Exceptional combination rarely available. | 88 |
| Price vs Analyst Consensus | $12.75 vs median target $18.00 | 41% upside to median | 17 analysts. Range $14.50-$21.00. Strong Buy consensus. Median $18.00 implies 41% upside — no target below $14.50. | 85 |
At $12.75, the market is implying approximately 15-20% annual revenue growth over 5 years (10% WACC, 20% terminal FCF margin).
The company delivered 65% revenue growth in Q4 2025, guided 50-60% TPV growth, and analysts forecast ~27% for FY2026. Market is pricing in <⅓ of actual growth trajectory. This is the dominant valuation insight — the market is wrong about growth by a wide margin if FY2025 trajectory continues.
Key risk: Gross margin compression could reduce earnings leverage even as revenue grows. If GM falls below 30%, the bull case weakens materially.
| Indicator | Value | Signal | Score | Notes |
|---|---|---|---|---|
| RSI (14) | ~50-52 (Apr 6 est.) Apr 2 actual: 54.54 |
NEUTRAL | 42 | NOT at oversold entry zone. Watchlist requires RSI < 40 for entry confirmation. RSI 50-52 is mid-range — no edge on timing. Need a 4-6 week pullback to <40 for optimal entry. This is the primary reason short-term is HOLD. |
| MACD Histogram | +0.113 (Apr 2) Est. +0.08-0.09 (Apr 6, slight pullback) |
BULLISH — Positive | 65 | MACD turned positive in late March after sustained negative period. MACD line crossed above signal line. Bullish signal on medium timeframe. Today's price pullback may slightly reduce histogram — still positive. |
| Price vs SMA20 | $12.75 vs est. ~$12.22 SMA20 Gap: +4.3% |
ABOVE — Bullish | 68 | Price recently crossed SMA20 upward. SMA20 ($12.22 est.) still below SMA50 ($12.65). Watch for SMA20 to cross SMA50 — golden cross would confirm trend reversal on medium timeframe. |
| Price vs SMA50 | $12.75 vs ~$12.65 SMA50 Gap: +0.8% |
JUST ABOVE — Watch | 60 | Price barely above SMA50 — not yet a confirmed breakout. SMA50 declining. A close below SMA50 would be bearish. Hold above $12.50 critical. |
| Price Structure | Low $11.22 (early March) → $12.75 today Recovery: +13.6% |
UPTREND from March lows | 70 | Trend module confirmed "uptrend" from Apr 2 data. Higher lows forming since March bottom. Q4 earnings catalyst (March 19) drove $12.44 → $13.37 spike (+7.5%) on 6.5M volume. Base forming constructively. |
| Volume / OBV | OBV: -1.72M (Apr 2, improving from -10M March low) Today vol: 1.39M (below prev 2.07M) |
IMPROVING but Thin | 55 | OBV recovering from deeply negative March levels. Earnings gap-up (March 19, 6.5M volume) was signal. Today's pullback on lower volume (1.39M vs avg ~1.8M) not alarming — constructive. |
| Stop-Loss Buffer | $12.75 - $11.15 stop = $1.60 (12.5%) | ADEQUATE | 60 | 12.5% buffer from stop at $11.15. Recent low $11.22 tested stop proximity (only $0.07 above stop in early March). Stop should be considered valid — tested and held. |
| Driver Signal | Current Reading | Direction | Impact on DLO |
|---|---|---|---|
| EM Economic Growth | Brazil/Mexico: GDP growth 2-3% | → Positive | Core EM markets growing. Middle class expansion driving digital payment adoption. Long-term secular tailwind. |
| Global Trade Volume | VIX 23.87 — tariff uncertainty elevated | ↓ Caution | DLO processes cross-border payments for EM merchants selling to global buyers. Trade war could reduce volumes if tariffs slow commerce. Key risk to 70% TPV growth guidance. |
| USD/EM FX | USD strengthening vs EM currencies (tariff risk-off) | ↓ Negative | DLO reports in USD; EM currency weakness reduces reported USD revenue from EM operations. FX headwind quantified at ~5-10% in recent quarters. |
| US Rate Differential | Fed Funds 3.64%, 10Y 4.35% | → Neutral | USD higher rates historically attract capital away from EM. Rate cuts in progress = gradual EM capital flow improvement. |
| ↑ | Business Quality | +5 | EM digital payments structural secular growth — DLO's infrastructure is enabling the digitization of EM commerce |
| ↑ | Valuation | +2 | EM discount partially justified but overstate risk given DLO's USD revenue structure and balance sheet |
| ↓ | Entry/Exit Timing | -1 | Tariff escalation adds EM currency volatility risk in short-term; cautious on timing |
Q1 2026 earnings beat May 13: TPV growth sustains 60%+. NRR holds 150%+. Gross margin stabilises at 34-36% (stops declining). Management signals take rate floor reached.
Target: $17-19 (+33% to +49%) within 6 months. Re-rates toward median analyst target $18.00 as margin fears abate.
Margin deterioration continues: GM falls to 28-30%. Trade war reduces cross-border TPV growth. FX headwind intensifies. Q1 earnings miss on EPS even as revenue grows.
Target: $11.15-12.00 (stop at $11.15). Stop loss $11.15 is well-anchored — tested twice in March.
{
"ticker": "DLO",
"timestamp": "2026-04-06-EOD",
"price": 12.75,
"ytd_pct": -10.6,
"52w_high": 16.42,
"52w_low": 11.22,
"volume_today": 1391875,
"scores": {
"quality": 85,
"valuation": 78,
"timing": 55,
"driver": 78
},
"signals": {
"short": "HOLD",
"medium": "STRONG_BUY",
"long": "STRONG_BUY"
},
"composite_scores": {
"short": 68,
"medium": 74,
"long": 77
},
"moat_score": 62,
"technicals": {
"rsi_apr2": 54.54,
"rsi_apr6_est": 51,
"macd_histogram_apr2": 0.113,
"macd_line_apr2": 0.0608,
"sma20_apr2": 12.1635,
"sma20_apr6_est": 12.22,
"sma50_apr2": 12.6688,
"price_vs_sma20_gap_pct": 4.3,
"obv_apr2": -1715993,
"trend": "uptrend"
},
"fundamentals": {
"fy2025_tpv": 40800000000,
"fy2025_revenue": 1090000000,
"q4_tpv": 13100000000,
"q4_tpv_growth_pct": 70,
"q4_revenue": 337900000,
"q4_revenue_growth_pct": 65,
"q4_gross_profit": 115800000,
"q4_gross_margin_pct": 34.3,
"q4_nrr_pct": 162,
"fy2025_nrr_pct": 145,
"fcf_adj": 190700000,
"fcf_conversion_pct": 97,
"net_cash": 658000000,
"net_cash_per_share": 2.23
},
"key_levels": {
"stop_loss": 11.15,
"support": 12.19,
"analyst_median_target": 18.00,
"analyst_high_target": 21.00,
"next_earnings": "2026-05-13"
},
"prior_calibration": {
"timestamp": "2026-04-06-1700",
"quality": 85,
"valuation": 80,
"timing": 62,
"driver": 80,
"note": "Prior timing was based on estimated intraday RSI ~38. Corrected to actual close RSI 54.54."
},
"macro": {
"fed_funds": 3.64,
"ten_yr_yield": 4.35,
"vix": 23.87
}
}