Back to top

Image: Bigstock

DLocal (DLO) Soars 8.8%: Is Further Upside Left in the Stock?

Read MoreHide Full Article

DLocal (DLO - Free Report) shares ended the last trading session 8.8% higher at $11.16. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 8.9% loss over the past four weeks.

DLocal extended its rally for the third straight day, driven by strength in its unified platform that enables global merchants to accept and make payments across more than 40 emerging markets with a single integration. The company’s robust local presence, including regulatory licenses and relationships with payment providers, banks and regulators, allows it to offer seamless compliance and settlement in local currencies. Its infrastructure is designed for scalability and agility, enabling the company to expand into new markets and integrate payment methods quickly.

Additionally, DLocal benefits from strong partnerships with top global merchants, many of whom generate recurring revenues and high transaction volumes. This drives a strong Net Revenue Retention rate through upselling and cross-border expansion. The company’s asset-light model and focus on operational efficiency support high margins and profitability, while its proprietary technology and deep market knowledge serve as strong barriers to entry for competitors.

This online payment company is expected to post quarterly earnings of $0.15 per share in its upcoming report, which represents no change from the year-ago quarter. Revenues are expected to be $231.04 million, up 34.9% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For DLocal, the consensus EPS estimate for the quarter has been revised 1.2% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on DLO going forward to see if this recent jump can turn into more strength down the road.

 

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

DLocal is part of the Zacks Financial Transaction Services industry. Nayax (NYAX - Free Report) , another stock in the same industry, closed the last trading session 5.5% higher at $49.19. NYAX has returned 14.5% in the past month.

Nayax's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.10. Compared to the company's year-ago EPS, this represents a change of +225%. Nayax currently boasts a Zacks Rank of #3 (Hold).


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


DLocal Limited (DLO) - free report >>

Nayax Ltd. (NYAX) - free report >>

Published in