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When InvestingPro’s Fair Value models identified DLocal Limited (NASDAQ:DLO) as significantly undervalued in October 2024, the cross-border payment processor was trading at just $8.92 per share. Ten months later, the stock has delivered a remarkable 71% return, demonstrating the power of data-driven valuation analysis. Investors seeking similar opportunities can explore today’s most promising candidates on the Most undervalued list.
DLocal operates a sophisticated payment processing platform serving emerging markets, with operations spanning over 40 countries and supporting more than 900 local payment methods. When InvestingPro’s models flagged the stock, the company was generating annual revenue of $729.5 million with EBITDA of $144.3 million, suggesting significant growth potential despite showing volatile trading patterns in the preceding months.
The Fair Value analysis proved prescient as DLocal’s fundamentals continued strengthening, with revenue expanding to $863.5 million and EBITDA reaching $188.9 million in recent quarters. The company’s strategic expansion into African markets through the AZA Finance acquisition has opened new growth avenues, while its asset-light business model has enabled sustained margin improvement.
Recent developments have validated InvestingPro’s initial thesis. The company’s latest quarterly results exceeded market expectations, leading to multiple analyst upgrades. JPMorgan raised its price target to $18, while Citi initiated coverage with a $14.60 target, citing DLocal’s strong competitive position in emerging markets and impressive execution capability.
InvestingPro’s Fair Value methodology combines multiple valuation approaches, including discounted cash flow analysis, comparable company metrics, and market-based indicators. This comprehensive framework helped identify DLocal’s intrinsic value when market sentiment was negative, providing investors with a clear signal of the stock’s potential.
The success of this analysis exemplifies the advantage of having access to sophisticated valuation tools and real-time market insights. Learn more about InvestingPro to discover how our Fair Value models, along with features like financial health scores and AI-powered analysis, can help you identify tomorrow’s market opportunities today.