Bill 'Latency Lord' Brennan
Fundamental Growth Investor, B2B/Sector Leaders & Picks-and-Shovels
dLocal can't be trusted to grow profits faster than revenue or sustain growth above 25%, so Nu, Sea and MercadoLibre, held in equal size, are preferred. dLocal's gross profit growth lags revenue, with explanations every quarter; they are likely valid, but the business is too disrupted by externalities, and confidence in its control of gross profit is gone. It remains the only investable fintech and could reach $20 by year-end on dividends and buybacks; below $14.50 it is worth adding again. x.com x.com
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.com
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.com
dLocal's diversified model makes its sharp selloff look unwarranted. x.com
PayPal's cost cuts and reserve releases prop up short-term numbers, while investing for growth wastes time. Its slow bleed gives delusional bulls hope, making it the ultimate value trap; it should not be a public company. x.com
PayPal is still growing, but the quality of its growth keeps worsening, which justifies a compressed multiple. Revenue rose 7% and TPV 11%, yet transaction margin dollars grew only 3%, operating income fell and GAAP EPS dropped 6% as operating margin shrank about 200 basis points. That points to Stripe, Adyen, Apple and Google eroding pricing power. Engagement is flattening, and guidance for falling near-term EPS signals a trend. At 10x earnings it is a fair business, not a great one. x.com … Show more
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.com
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.com
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.com
dLocal is still cheap at a low-teens free-cash-flow multiple while growing 25-35%. It needs so little capital to sustain hypergrowth that it pays out half its free cash flow as dividends, and with almost no stock-based compensation it can keep growing well above 25% for a long time. At 10-12x free cash flow it looks worth multiples of the current price. x.com x.com
dLocal is growing nearly as fast as an LLM company yet trades at just 2x, so the dip is worth buying. x.com x.com