NASDAQ:DLO

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DLocal (DLO) Stock Jumps After UBS Upgrades Shares to Buy

DLocal (NASDAQ: DLO) shares surged approximately 13% on Wednesday after UBS upgraded the global payments company to Buy from Neutral and raised its price target to $20 from $16.

The analyst upgrade reflected growing confidence in DLocal's earnings outlook and long-term growth prospects as demand for cross-border payment solutions continues to expand across emerging markets.

UBS analyst Kaio Prato upgraded the stock to Buy while increasing the firm's price target by 25%, signaling stronger conviction that the company's valuation does not fully reflect its future growth potential.

DLocal continues to benefit from increasing digital payment adoption and its expanding presence in emerging markets, where multinational companies rely on its platform to process local payments efficiently.

# Why DLO Stock Rose

Investors reacted positively to several developments:

* UBS upgraded DLocal to Buy from Neutral.
* The firm raised its price target to $20 from $16.
* The upgrade signaled increased confidence in the company's long-term growth outlook.
* Investors responded favorably to the improved analyst outlook for the global payments provider.
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Author
WS Investor 07-02-26
dLocal Drops 8% in Premarket as Margin Compression and Weak Free Cash Flow Overshadow Record TPV

May 14, 2026 | NASDAQ: DLO

dLocal is falling sharply in premarket despite reporting a quarter with genuine top-line strength, as investors focus on deteriorating margins, a significant free cash flow miss, and a take rate trajectory that continues to compress — concerns that have been a recurring theme for this payments company.

Total Payment Volume surpassed $14 billion for the first time, up 73% year-on-year and marking six consecutive quarters of 50%-plus TPV growth. Gross profit reached a record $119 million, up 40% year-on-year. Those are strong headline numbers. But the math reveals the problem — TPV growing at 73% while gross profit grows at 40% means take rate is compressing meaningfully. The implied gross take rate on $14 billion in TPV producing $119 million in gross profit works out to approximately 0.85%, and the divergence between volume growth and profit growth is widening rather than narrowing.

Operating profit of $57 million, excluding prior-year tax adjustments, grew 25% year-on-year — again lagging TPV growth substantially. Net income of $52 million, also excluding tax adjustments, grew just 11%. The inclusion of "prior-year tax adjustments" in the exclusions adds complexity that the market is not giving full credit for, particularly given dLocal's history of tax-related surprises across its emerging market jurisdictions.

The most alarming number is adjusted free cash flow of just $15 million, which management attributed to temporary working capital effects expected to revert. That explanation may well be correct — payments companies can experience significant working capital timing swings — but the market is not in a mood to give the benefit of the doubt, particularly when operating expenses are elevated from 2025 carry-over and management acknowledges operating leverage will only improve in the second half of 2026.

The unchanged guidance provides some comfort that management is not lowering expectations, but it offers little to reverse the negative sentiment on a day when investors are already scrutinizing every data point. For a company that was once celebrated for its high-margin, asset-light emerging market payments model, the persistent take rate compression and free cash flow volatility are keeping a valuation ceiling firmly in place. The 8% premarket decline reflects a market that has heard the "temporary" and "revert" explanations before and is waiting to see the numbers rather than the narrative.
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Author
Global Finance News 05-15-26
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10-03-25The Investor