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

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

Valuation and Earnings

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

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

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.

Insider and Institutional Ownership

39.8% of PDD shares are held by institutional investors. Comparatively, 90.1% of DLocal shares are held by institutional investors. 3.7% of PDD shares are held by insiders. Comparatively, 45.4% of DLocal shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

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

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

Analyst Recommendations

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

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

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

Volatility and Risk

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

Summary

PDD beats DLocal on 9 of the 15 factors compared between the two stocks.

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.

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.