Dlocal's 2026 Outlook: Soaring Total Payment Volume Meets a Reasonable Valuation

A global enterprise merchant needs to process a local bank transfer in Brazil, a cash payment in Mexico, and a digital wallet transaction in Indonesia, all while keeping a single point of integration. That is the fundamental friction Dlocal (NASDAQ:DLO) solves. By providing a unified software layer for cross-border payments in fragmented emerging markets, it has scaled into a crucial financial engine for global commerce. The stock currently trades at $14.95 as of Sept. 11, 2026, and it has gained roughly 10% over the past year.

Our proprietary Hidden Gems scoring system assigns Dlocal an overall Superscore of 77 out of 100, placing it in the Strong category. The Superscore is an AI-powered score that evaluates a company's overall strength by combining financial performance, product market position, technological capabilities, leadership quality, and relative valuation. It represents the unification of all our scores into a single score for public companies, with five rating bands: Exceptional (90-100), Strong (75-89), Above Average (60-74), Average (40-59), and Cautious (0-39). A 77 Superscore places Dlocal in the Top ~15% among all companies we score. This article pairs the business strengths driving that score with the operational constraints that keep it from rising higher, giving you a balanced data-driven signal to investigate further.

Why DLO Has a 77 Superscore

• Scalable infrastructure model: The 'One Dlocal' single-API platform allows the company to enter new markets without building local banking rails from scratch, driving revenue growth to over $1 billion in 2025.
• Deepened enterprise stickiness: A net revenue retention rate of 153% as of Q2 2026 demonstrates that once a merchant integrates the platform, it steadily expands its payment volume across the network.
• Superior capital efficiency: The asset-light business model requires minimal capital expenditure to sustain growth, enabling it to convert significant revenue gains into robust operating cash flow.
• Proven market execution: Management consistently captures market share in complex, emerging territories, as evidenced by a 92% year-over-year surge in total payment volume in the second quarter of 2026.

Why Is DLO's Superscore Not Higher?

• Systemic client concentration: Approximately 61% of total revenue is generated by its top 10 merchants, creating a precarious growth narrative where the loss of one major contract would materially damage the business.
• Margin compression pressure: Increased competition and a strategic focus on larger enterprise clients have driven gross margins down from 53% in 2021 to around 37% in 2025, signaling that scaling comes at a steep price.
• Operational and regulatory complexity: The company incurs significant costs to meet Western regulatory standards and manage local-to-local flows, complicating its path toward sustained operating leverage.
• Fairly priced valuation: The stock trades at a trailing P/E ratio of 21.7, which leaves little margin for error if growth cools or if emerging-market volatility disrupts its quarterly earnings cadence.

Dlocal's high return on net tangible assets -- it earns substantial profits on a very small base of hard physical infrastructure -- means the company can translate incremental revenue growth into outsize returns. The market pays a premium for this efficiency, and while the current valuation introduces risk, this capital-light capability remains a powerful engine for long-term compounding.

Is DLO Right For Your Portfolio?

This stock warrants a closer look if...

• You are seeking exposure to the best small-cap tech stocks with durable, difficult-to-replicate regulatory moats in emerging markets.
• You value companies that utilize a capital-light, high-turnover model to generate strong cash flows from a global enterprise merchant base.

You may want to keep researching before buying if...

• You are concerned about the risk of heavy concentration in having the majority of revenue tied to just a handful of massive enterprise customers.
• You find the combination of aggressive related-party transactions and opaque executive compensation structures to be incompatible with your governance standards.

The Superscore is one data-driven signal worth investigating, and this analysis is meant to be paired with your own due diligence regarding your financial goals and risk tolerance. Please weigh the operational strengths against the structural risks before making any investment decision.

My 5-year prediction for DLO stock

While DLO stock may still be 78% below its all-time high from 2021, the company's actual operations appear to only be getting stronger over time. This disjunction between improving operational performance and a lagging share price can be a powerful combination for investors, as we may be able to buy a growth stock at a now-reasonable valuation.

Dlocal has now grown total payment volume (TPV) by 50% or more for seven straight quarters, including last quarter's 92% surge. Meanwhile, the company's net revenue retention rate (NRR) last quarter was 153%, marking its fifth straight quarter above 140%. This persistently high NRR rate reinforces the notion that once a merchant starts using Dlocal's offerings, it rapidly scales with them, adding new solutions as it goes.

That said, the big question facing Dlocal right now is its profitability. While TPV soared 92%, revenue jumped 56%, gross profit rose only 29%, and net income increased 28% last quarter, indicating that the company's take rate continues to be squeezed, hampering margins. However, CEO Pedro Arnt -- former MercadoLibre CFO -- has long warned about this development, given Dlocal's volume-tiered contracts with mega customers like Amazon and Uber. Said another way, the company is happy to get its "foot in the door" with these massive enterprises at a discounted take rate in exchange for the opportunity to grow volume alongside them, and potentially upsell them on new solutions.

At some point, this take rate will bottom out, and I believe that could be a turning point for DLO stock. CEO Pedro Arnt touched on this notion in the company's Q2 earnings call, explaining,

One interesting data point is if we exclude this one very large merchant relationships and a few currency volatility effects, net take rate would have been very close to flat quarter-over-quarter despite TPV growth that still would have been in excess of 65% year-on-year.

Trading at 17.4 times forward earnings, Dlocal looks like an excellent buy today and a strong contender to outperform over the next five years as it builds on its leadership position in the emerging-markets payments niche. Should Pedro Arnt prove to be correct and we see Dlocal's take rate bottom out or even recover over the next five years, its impressive growth could serve as a multiplier for investors.

The Hidden Gems Superscore reflects The Motley Fool's proprietary AI-driven evaluation of a company across product, financial, leadership, and valuation pillars as of the article date and may change over time. Performance figures are point-in-time. Past performance does not guarantee future results.

Josh Kohn-Lindquist has positions in DLocal, MercadoLibre, and Uber Technologies. The Motley Fool has positions in and recommends Amazon and MercadoLibre. The Motley Fool recommends DLocal and Uber Technologies and recommends the following options: long January 2027 $7 calls on DLocal and short January 2027 $10 calls on DLocal. The Motley Fool has a disclosure policy.