DLocal Stock Surges After Fintech Posts Earnings. Why One Analyst Sees 18% Upside.

Shares of dLocal got a boost after the fintech reported better-than-expected earnings and revenue in its second quarter. (Dreamstime)

Shares of dLocal soared on Thursday after the payments platform posted a strong second quarter, with one analyst asserting the stock could climb even higher.

The fintech logged revenue of $256.5 million, up 50% from a year earlier and above the $229.6 million analysts had forecast, according to FactSet. Earnings of 14 cents a share narrowly topped expectations of 13 cents a share.

The company said total payment volume in the quarter reached a record $9.2 billion, up 53% from last year. DLocal also announced the appointment of Guillermo López Pérez as chief financial officer. Pérez, a nearly three-decade veteran of the payment industry who boasts previous stints at Visa and American Express, will join the company “in the next few months,” dLocal said.

While the latest quarter was encouraging, analysts are split on where to stand. Of 10 firms polled by FactSet, five rate the stock at Buy and five at Hold.

Susquehanna is among the bulls, with analyst James Friedman reiterating a Buy rating and $18 price target in a research note, arguing that shares will “continue to re-rate higher.”

The stock surged 30% to $15.25 on Thursday, with Friedman’s price target suggesting 18% upside.

In his view, dLocal’s diversification throughout markets in Asia and South America is a compelling part of the growth story. “Nearly 90% of the world’s young people under the age of 20 will likely reside in emerging markets by 2050 … and they will likely pay the way they want to pay,” Friedman wrote. “Think global, buy dLocal.”

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com