Citi Initiates Coverage of DLocal (DLO) with a Buy Rating

On Tuesday, Citi analyst Arnon Shirazi initiated coverage of DLocal Limited (NASDAQ:DLO) with a Buy rating and a $14.60 price target. This sentiment comes from DLocal’s expanding payment volume and strategic position. Global competition remains concentrated in developed markets, and DLocal is a certain choice for merchants that are looking to expand into emerging markets.

A modern payment processor with illuminated buttons in a busy financial district.

DLocal recently reported strong Q1 2025 financial results on May 14. The company achieved record highs in revenue, which reached $217 million and was up 18% year-over-year, as well as in gross profit, which stood at $85 million and grew 35%. Notably, the company’s Total Payment Volume/TPV surged by 53% year-over-year to $8.1 billion. It also grew 5% sequentially.

However, local-to-local TPV declined 3% sequentially due to seasonality and partial loss of share with a large merchant in Mexico. Increased processing costs in South Africa and Nigeria also impacted gross profit margins. DLocal Limited (NASDAQ:DLO) operates a global payment processing platform. It offers a pay-in solution that allows businesses to get paid for their products and services through various payment methods.

While we acknowledge the potential of DLO to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than DLO and that has 100x upside potential, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.