Legal win shifts focus back to DLocal’s business fundamentals

DLocal (DLO) drew investor attention after announcing that a New York appellate court unanimously affirmed the dismissal of a securities class action, removing a key legal overhang tied to its registration statement disclosures.

The legal resolution comes after a mixed stretch for the stock, with a 30 day share price return of 10.53% and a 1 year total shareholder return of 61.11%. This suggests recent momentum has picked up after a softer year to date share price return.

If this legal outcome has you reassessing payment and fintech names, it could also be a good moment to scan for other financial technology ideas through 18 top founder-led companies

With the lawsuit now resolved, DLocal is trading at US$13.75, with an indicated 33% intrinsic discount and a 28% gap to the analyst price target. The key question is whether this signals an opportunity or if the market already reflects future growth.

Most Popular Narrative: 38.9% Undervalued

According to one of the most followed narratives on DLocal, a fair value of $22.49 per share sits well above the last close at $13.75, which is shaping a clear undervaluation story in that framework.

The trading narrative for dLocal (DLO), based on the DCF Valuation by HatedMoats, is that the stock is significantly undervalued.

Intrinsic Value (Base Case): $22.49 per share.

According to cracken25, this valuation hangs on a capital light model, robust free cash flow assumptions and a margin profile more often associated with larger payment leaders. Curious which revenue trajectory and profitability mix would need to hold to back a fair value almost $9 above today’s price.

Result: Fair Value of $22.49 (UNDERVALUED)

However, this hinges on margins staying resilient and on regulatory surprises or shifts in key markets like Brazil or Mexico not eroding the cross border payments thesis.

Next Steps

If this mix of legal clarity and valuation debate leaves you unsure, do not wait for consensus. Check the 4 key rewards.

Looking for more investment ideas?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.