Head-To-Head Review: PDD (NASDAQ:PDD) vs. DLocal (NASDAQ:DLO)

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

Risk and Volatility

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

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%

Insider and Institutional 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 hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DLocal	$745.97 million	3.31	$148.96 million	$0.40	20.83
PDD	$393.84 billion	0.42	$8.45 billion	$10.55	11.42

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.

Analyst Ratings

This is a breakdown of recent ratings and target prices for DLocal and PDD, as provided by MarketBeat.

	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 presently has a consensus target price of $11.94, indicating a potential upside of 43.39%. PDD has a consensus target price of $169.91, indicating a potential upside of 41.06%. Given DLocal’s higher possible upside, research analysts plainly believe DLocal is more favorable than PDD.

Summary

PDD beats DLocal on 9 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.