DLocal (DLO) Surges 10.4%: Is This an Indication of Further Gains?

DLocal (DLO) shares rallied 10.4% in the last trading session to close at $15.68. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 0.1% gain over the past four weeks.

DLocal extended its rally for the second straight day, driven by strength in its ability to facilitate complex cross-border payments through a single, unified platform tailored to emerging markets. Operating in more than 40 countries, the company holds or is pursuing local licenses across Latin America, Africa and Asia, allowing it to offer compliant, localized pay-in and pay-out services. Its deep knowledge of local regulations, currencies and consumer behaviors positions it as a trusted partner for global merchants seeking access to these fragmented, high-growth regions without having to manage multiple providers or integrations.

In addition, DLocal’s scalable infrastructure and proprietary technology support high transaction volumes while minimizing fraud risk through advanced risk management tools. Its focus on long-term partnerships has led to high client retention and consistent growth in net revenue retention. The company serves leading global merchants across verticals like streaming, SaaS, e-learning and travel.

This online payment company is expected to post quarterly earnings of $0.16 per share in its upcoming report, which represents a year-over-year change of +6.7%. Revenues are expected to be $269.66 million, up 45.2% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For DLocal, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on DLO going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

DLocal is a member of the Zacks Financial Transaction Services industry. One other stock in the same industry, CompoSecure, Inc. (CMPO), finished the last trading session 2.9% higher at $20.45. CMPO has returned 1.8% over the past month.

CompoSecure's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.23. Compared to the company's year-ago EPS, this represents a change of -14.8%. CompoSecure currently boasts a Zacks Rank of #2 (Buy).

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This article originally published on Zacks Investment Research (zacks.com).

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