DLocal (NASDAQ:DLO) & PDD (NASDAQ:PDD) Critical Comparison

DLocal (NASDAQ:DLO) and PDD (NASDAQ:PDD) are both business services companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, valuation, analyst recommendations, institutional ownership, risk, profitability and earnings.

Volatility and Risk

DLocal has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500. Comparatively, PDD has a beta of 0.69, meaning that its share price is 31% less volatile than the S&P 500.

Institutional & Insider Ownership

90.1% of DLocal shares are owned by institutional investors. Comparatively, 39.8% of PDD shares are owned by institutional investors. 45.4% of DLocal shares are owned by company insiders. Comparatively, 3.7% of PDD shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings for DLocal and PDD, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DLocal	0	7	2	0	2.22
PDD	0	5	8	1	2.71

DLocal currently has a consensus price target of $11.94, indicating a potential upside of 23.39%. PDD has a consensus price target of $169.91, indicating a potential upside of 35.66%. Given PDD’s stronger consensus rating and higher possible upside, analysts plainly believe PDD is more favorable than DLocal.

Profitability

This table compares DLocal and PDD’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DLocal	16.35%	32.59%	12.95%
PDD	29.05%	46.08%	26.60%

Valuation and Earnings

This table compares DLocal and PDD”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DLocal	$745.97 million	3.84	$148.96 million	$0.40	24.20
PDD	$372.11 billion	0.46	$8.45 billion	$10.55	11.87

PDD has higher revenue and earnings than DLocal. PDD is trading at a lower price-to-earnings ratio than DLocal, indicating that it is currently the more affordable of the two stocks.

Summary

PDD beats DLocal on 10 of the 15 factors compared between the two stocks.

About DLocal

DLocal Limited operates a payment processing platform worldwide. The company offers pay-in solution which the business and get paid for their products and services through various payment methods, including international and local cards, online bank transfers and direct debit, cash, and alternative payment methods. It also provides pay-out solution used for merchants to scale pay-out operations. In addition, the company offers dLocal for Platforms, an end-to-end payment solution that offers a range of services to help platforms manage payments. It serves its products to commerce, streaming, ride-hailing, financial services, advertising, SaaS, travel, e-learning, on-demand delivery, and gaming and crypto industries. DLocal Limited was founded in 2016 and is headquartered in Montevideo, Uruguay.

About PDD

PDD Holdings Inc., a multinational commerce group, owns and operates a portfolio of businesses. It operates Pinduoduo, an e-commerce platform that offers products in various categories, including agricultural produce, apparel, shoes, bags, mother and childcare products, food and beverage, electronic appliances, furniture and household goods, cosmetics and other personal care, sports and fitness items and auto accessories; and Temu, an online marketplace. It focuses on bringing businesses and people into the digital economy. The company was formerly known as Pinduoduo Inc. and changed its name to PDD Holdings Inc. in February 2023. The company was incorporated in 2015 and is based in Dublin, Ireland.