Is Dlocal (DLO) The Best Small-Cap Stock to Buy Now?

We recently published 10 Best Small-Cap Stocks With Huge Potential According to Reddit as Market Looks Beyond AI Trade. Dlocal Ltd (NASDAQ:DLO) is among the best small-cap stocks to buy according to Redditors.

Dlocal Ltd (NASDAQ:DLO) is a Uruguayan financial technology company providing cross-border payment services. Redditors are fond of the company’s management, double-digit revenue growth and increasing total addressable market.

“If they can increase their profit margins by cross-selling other services like risk management that might lead to a valuation multiple increase,” a Redditor commented about the stock a couple of months ago.

Dlocal Ltd (NASDAQ:DLO) is up 10% so far this year.

Polen Global SMID Company Growth Strategy stated the following regarding DLocal Limited (NASDAQ:DLO) in its Q2 2024 investor letter:

 “DLocal Limited (NASDAQ:DLO), a payments processing company headquartered in Uruguay saw further weakness after reporting disappointing first quarter results. While payment volumes and revenues grew 49% and 34%, respectively, in 1Q 2024, gross profit only grew 2% due to elevated processing costs. The company has also invested more in building out its scale and functionality, which further weighed on profitability. Longer term, as one of the leading emerging markets payments processing companies, we believe dLocal can continue to see attractive growth and improve profitability under a highly-regarded management team.”

While we acknowledge the potential of DLO as an investment, 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 extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

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