DLocal's Stellar Q2 Performance And New Co-CEO Appointment: Why Analyst Is Bullish On Future Prospects

Susquehanna analyst James E Friedman reiterated a Positive rating on DLocal Limited DLO, raising the price target to $24 from $18.

The company recently reported Q2 results, registering $4.4 billion in total payment volume, up 80% year-over-year and 22% quarter-over-quarter. 

The company appointed Pedro Arnt to serve as co-Chief Executive Officer alongside Sebastián Kanovich, effective immediately.

The analyst is encouraged by the improved fundamentals and the talent at the top. 

As an early employee of one of the world's largest eCommerce companies, the analyst thinks Arnt's professional endorsement will surface the value DLO brings to merchants. 

In addition to operational expertise, the analyst is particularly watchful for Pedro's dig into his network of Global eCommerce contacts to further expand DLO's presence as the xBorder payment provider of choice for global eCommerce companies accessing emerging markets.

Based on the above developments, Friedman raised the 2023 revenue estimate to $636.5 million from $631.3 million prior estimate. 

FY23 adjusted EBITDA estimate is raised to $219.8 million from the previous guidance of $213.1 million.

The analyst increased the FY23 EPS estimate to $0.57 from $0.53. 

For FY24, the analyst raised revenue estimates at $899.7 million from the prior estimate of $892.3 million.

Friedman increased the adjusted EBITDA forecast for FY24 to $313.1 million from $303.4 million.

The analyst raised the FY24 EPS estimate to $0.81 from $0.76 prior.

On the flip side, the analyst sees a downside risk of $15, which could occur from losing a top merchant, insourcing payments processing, and regulatory risks from operating in various emerging markets.

Price Action: DLO shares are trading higher by 34.5% to $20.86 on the last check Wednesday.