Why DLocal Stock Is Getting Hammered This Week

DLocal shares are taking a brutal beating this week—down double digits as payment processing headaches spark investor panic.

Emerging Market Pressures

Revenue growth stalls in key Latin American markets. Currency volatility and regulatory shifts hammer margins. The 'high-growth fintech' narrative faces a reality check.

Competition Intensifies

Local payment rivals gain traction. Global giants like Stripe and Adyen push deeper into DLocal's turf. Market share erosion isn't just a risk—it's already happening.

Investor Patience Wears Thin

Another earnings miss. Guidance cut. The usual 'long-term opportunity' talk falls flat when short-term results keep disappointing. Even crypto traders would blush at this volatility.

DLocal's sink-or-swim moment arrives—fix the execution flaws fast, or join the graveyard of fintechs that promised disruption but delivered disappointment. Typical finance sector: overpromise first, figure out the model later.

What does this mean for DLocal?

While this short-term drop temporarily harms all DLocal investors, nothing has fundamentally changed in the company's actual operations.

Instead, its largest shareholder, an affiliate of private equity firm General Atlantic, is simply selling a portion of its shares. Since General Atlantic made its initial minority investment in the company in 2019 -- and will still hold roughly 49 million shares -- I don't believe the offering is an indictment of DLocal.

Investing groups like General Atlantic have a multitude of reasons for selling a given stock, and after a 50% pop over the last year is as good a time as any.

Image source: Getty Images.

If anything, this week's drop makes me interested in adding to my DLocal position. DLocal connects some of the largest merchants in the world to over 2 billion people in emerging economies from more than 40 countries across Latin America, Africa, and Asia, with its suite of 900-plus payment options.

Growing total payment volume (TPV) by 53% in its latest quarter -- and guiding for 40% to 50% TPV growth in 2025 -- DLocal could prove to be a great long-term buy at just 21 times free cash flow.