• dLocal Limited recently reported first-quarter 2026 results, with revenue rising to US$335.86 million from US$216.76 million a year earlier, while net income eased to US$41.98 million and diluted EPS to US$0.14.
• Alongside record payment volumes and gross profit, the company faced margin pressure from higher costs and a prior-period tax adjustment, even as it completed a US$10.12 million share buyback and declared a cash dividend.
• We’ll now examine how strong volume growth but compressed margins and a one-off tax hit affect dLocal’s existing investment narrative.

Find 51 companies with promising cash flow potential yet trading below their fair value.

DLocal Investment Narrative Recap

To own dLocal, you need to believe that its broad, emerging market payments network and growing TPV can offset pressure on margins and earnings volatility. The key short term catalyst remains whether rapid TPV and revenue growth can translate into healthier profitability, while the biggest risk is that structurally lower take rates and higher costs keep net income under pressure. Q1’s strong top line but softer EPS does not yet fundamentally change that, but it sharpens the focus on margins.

The most relevant recent announcement here is Q1 2026 earnings, where TPV climbed 73% year over year to US$14.1 billion and revenue rose 55% to US$335.9 million, yet gross margin compressed and net income slipped to US$42 million. Management kept full year guidance, which ties directly into the near term catalyst of achieving better operating leverage, but also highlights the risk that cost inflation and take rate pressure could weigh on earnings if that improvement stalls.

Yet beneath the strong volume story, investors should be aware of how sustained margin compression and lower take rates could eventually...

DLocal's narrative projects $2.5 billion revenue and $427.3 million earnings by 2029. This requires 27.0% yearly revenue growth and about a $235.2 million earnings increase from $192.1 million today.

Uncover how DLocal's forecasts yield a $17.65 fair value, a 60% upside to its current price.

Exploring Other Perspectives

Some of the lowest ranked analysts were already cautious, assuming revenue would reach about US$2.0 billion and earnings US$361.9 million by 2029, and Q1’s margin squeeze may either reinforce or soften that pessimism depending on how you view the trade off between growth and profitability.

Explore 19 other fair value estimates on DLocal - why the stock might be worth just $14.50!

Reach Your Own Conclusion

Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts.

• A great starting point for your DLocal research is our analysis highlighting 4 key rewards that could impact your investment decision.
• Our free DLocal research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate DLocal's overall financial health at a glance.

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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.