DLocal Limited (DLO) PT Lowered to $14 at Susquehanna

Susquehanna analyst James Friedman lowered the price target on DLocal Limited (NASDAQ: DLO) to $14.00 (from $21.00) while maintaining a Positive rating.

The analyst commented: "Despite very strong TPV growth of nearly 38% (up 13.7% Q/Q), revenue growth slowed to 6% Y/Y (34% last quarter), due in part to a 94% decline in revenue from Nigeria and 13% decline in Chile, both due to weak FX. The repricing of their largest client by volume continues to weigh on the take rate. That said, we were encouraged to see the stand up
of several large new merchants that are now boarded. Though this was another noisy quarter, we believe it is a natural consequence of emerging market volatility, the complexity of which is how they add value. We are maintaining our Positive rating but cutting our price target to $14 ($21 prior) based on ~13x EV/EBITDA (18x prior). SFG spoke to DLO during our callback; please reach out to me or your SFG salesperson for callback details. We calculate the lower bound of gross profit growth and adjusted EBITDA/gross profit margin guidance for F'24 sum to be 61% as the company invests in engineering and other essential infrastructure (headcount investments largely in Technology & Product, Sales, and Operations)."

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