Mr. Misunderstood
Long-Term Investor, Misunderstood Businesses & Asymmetric Upside
DLocal is an overlooked opportunity because total payment volume is outgrowing its declining take rate by a wide margin, so the take-rate worry the market fixates on shouldn't be a problem. It also has a rock-solid balance sheet, an outstanding management team and a forward P/E of just 13. x.comÂ
dLocal's diversified model makes its sharp selloff look unwarranted. x.comÂ
dLocal could be the Adyen of emerging markets, quietly building payment rails for the next billion consumers. It combines 25-30%+ growth, expanding margins and solid 2026 guidance with a surprisingly low valuation. x.comÂ
dLocal faces stronger competitors and margins that will keep falling. Many of its regions are a constant uphill battle; even if it does well long term, payments stocks are uninvestable. x.comÂ
dLocal's business is materially better than in 2021, yet its valuation is far lower. It now generates nearly as much gross profit in one quarter as it did in all of 2021, while its market cap is $4B against a $20B peak in 2021. x.comÂ
dLocal is growing nearly as fast as an LLM company yet trades at just 2x, so the dip is worth buying. x.com x.comÂ
dLocal sits in payment processing, a sector that 30 years of data show to be dead because margins are low. Fintech is just software, without the asset leverage that banks have. dLocal fell about 11% after EPS of $0.14 missed the $0.15 estimate, per TrendSpider. x.com x.com x.comÂ
dLocal remains one of the highest-conviction long-term holdings, a hated moat whose great results drew only a 5% after-hours gain. Per @mvcinvesting, Q4 revenue was $337.9M versus $296.1M expected, free cash flow doubled to $64.7M and payment volume grew 70%. For 2026 dLocal guides 50-60% volume growth and 27.5-32.5% operating profit growth, and it announced a $300M buyback. x.comÂ
The market isn't crediting dLocal for faster payment volume growth, which more than makes up for its lower take rate. Per @realroseceline, TPV grew 92% in Q2, and about 50% of the $127m of gross profit became operating profit, up from 44% last quarter, as gross profit rose 7% while operating expenses fell about 4%. The stock dropped roughly 10% after EPS missed by a penny before recovering most of the decline. x.comÂ
dLocal's take rates face merciless, structural pressure from regional competition and market structure. Management, by contrast, expects only an asymptotic take-rate decline and nothing structural. The stock fell 8% after Q1 earnings. x.com x.com x.com x.comÂ
dLocal is an overlooked picks-and-shovels play on emerging-market digital payments, combining real growth, real profitability and a huge runway outside the US. In the fourth quarter, payment volume grew 70%, revenue 65%, gross profit 38% and net income 87%. Full-year 2025 revenue crossed $1B for the first time, and adjusted free cash flow rose 110%. x.comÂ
