DLocal (DLO) Stock Still Looks Cheap As Shares Fell 75% In 5 Years

DLocal has seen its share price move around over the years, and that history now puts a spotlight on a simple issue for investors. The question is whether the current US$14.45 price tag is supported by the returns the business earns on the capital it puts to work.

• The stock has fallen 75.4% over 5 years, which puts more weight on whether the underlying return on capital story justifies staying invested at all.

• The new partnership with Oscilar to upgrade anti money laundering monitoring and compliance across more than 60 markets can affect future returns on capital by influencing how much DLocal must reinvest to support growth and manage regulatory risk.

• What if you looked at DLocal through its earnings instead? See why DLocal's 20.8x P/E tells a different valuation story .

For investors, the debate is whether DLocal's current share price fairly reflects the returns it earns on its capital base today and what that could mean over time.

If you want to test the same question about the returns on capital across a broader set of businesses, compare DLocal with solid balance sheet and fundamentals stocks screener (22 results) .

Is DLocal a Bargain on Excess Returns?

The Excess Returns model starts with what DLocal earns on each dollar of equity and compares that with what shareholders require in return. Book Value sits at $1.88 per share and the Average Return on Equity is 42.11%, which feeds into a Stable EPS estimate of $1.30 per share based on inputs from 6 analysts. After charging a Cost of Equity of $0.27 per share, the Excess Return comes out at $1.03 per share, suggesting the business is projected to generate value above its funding cost on a per share basis.

Those excess profits are then paired with a Stable Book Value forecast of $3.09 per share, sourced from 4 analyst estimates, to build a path of value creation over time. Against a current share price of $14.45, the Excess Returns projections put DLocal's estimated intrinsic value substantially above the current share price. Because the new Oscilar AML platform could influence compliance costs and risk management quality, that partnership helps explain why some investors may focus on whether the market is discounting the durability of these modeled excess returns. Find out what DLocal could be worth using our Excess Returns estimate .

The DLocal Narrative: What Would Justify Today's Price?

Narratives for DLocal pick up where the valuation puzzle leaves off by laying out which paths for growth, margins and earnings would need to hold for the stock to be worth much more or much less than today. They sit on Simply Wall St's Community page and turn a single valuation output into a set of future conditions, so you can watch over time whether the real business is tracking the scenario that number depends on.