DLocal Limited The turning point - Upgrade to Buy

Research evidence excerpt

DLocal Limited The turning point - Upgrade to Buy

ompetition/new technologies. On a growth-adjusted basis, the 12/26E 0.83 0.81 -2 0.82

stock appears undervalued, as its ~31% EPS CAGR 2027-28E would justify a multiple 12/27E 1.02 1.11 9 1.06

closer to ~18x, in our view. We expect the continuation of solid execution with high 12/28E 1.17 1.41 20 1.24

growth trends to be the key driver to restore confidence, as delivery through the

2H26 investment-cycle deceleration and op. leverage should enhance earnings Kaio Prato

predictability. Notably, DLO has met its guidance in each of the past 2yrs, suggesting Analyst

kaio.prato@ubs.com

improving consistency and supporting a potential narrowing of the "stability

+55-11-3513 6573

discount". Finally, when we compare to its closest private peers - although we take a

conservative read - DLO is also trading with a discount vs. recent transactions. Camila Azevedo

Associate Analyst

camila.azevedo@ubs.com

New estimates considering higher growth and operating leverage

+55-11-2767 6881

We raise our TPV estimates, mostly driven by higher share of wallet, supported by

geographic expansion and new products/verticals. We now expect ~31% CAGR for

TPV in 2026-30E. We assume lower take rates due to mix shift (e.g., A2A, PIX). On Thi

costs, we incorporate recent trends seen in 1Q26, with some increase in 2027-28, s is an

still resulting in operating leverage. ImageM

Valuation: Up to Buy (from Neutral); PT of US$20 (from US$16)

Our PT is derived by a PE target multiple applied to our NTM earnings estimates

(rolled fwd), and it is backed by a DDM. Our target PE is unchanged at 16x.

Highlights (US$m) 12/23 12/24 12/25 12/26E 12/27E 12/28E 12/29E 12/30E

Revenues 650 746 1,094 1,530 2,005 2,507 2,947 3,309

EBIT (UBS) 180 141 220 279 379 481 567 637