Critical Review: Repay (NASDAQ:RPAY) and DLocal (NASDAQ:DLO)

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

Analyst Recommendations

This is a summary of current recommendations and price targets for DLocal and Repay, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DLocal	0	4	6	1	2.73
Repay	1	5	5	0	2.36

DLocal presently has a consensus target price of $16.40, suggesting a potential upside of 37.01%. Repay has a consensus target price of $6.92, suggesting a potential upside of 128.27%. Given Repay’s higher probable upside, analysts clearly believe Repay is more favorable than DLocal.

Insider & Institutional Ownership

90.1% of DLocal shares are held by institutional investors. Comparatively, 82.7% of Repay shares are held by institutional investors. 45.4% of DLocal shares are held by company insiders. Comparatively, 12.0% of Repay shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares DLocal and Repay”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DLocal	$745.97 million	5.01	$120.42 million	$0.56	21.38
Repay	$313.04 million	0.88	-$10.16 million	($1.37)	-2.21

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
DLocal	17.80%	37.66%	14.84%
Repay	-39.08%	9.04%	4.33%

Risk & Volatility

DLocal has a beta of 1.13, indicating that its share price is 13% more volatile than the S&P 500. Comparatively, Repay has a beta of 1.61, indicating that its share price is 61% more volatile than the S&P 500.

Summary

DLocal beats Repay on 13 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 Repay

Repay Holdings Corporation, payments technology company, provides integrated payment processing solutions to industry-oriented markets in the United States. It operates through two segments: Consumer Payments and Business Payments. The company's payment processing solutions enable consumers and businesses to make payments using electronic payment methods. It also offers a range of solutions relating to electronic payment methods, including credit and debit card processing, automated clearing house (ACH) processing, e-cash, and digital wallet services; virtual credit card processing, enhanced ACH processing, instant funding, clearing and settlement, and communication solutions; and proprietary payment channels that include Web-based, virtual terminal, online client portal, mobile application, text-to-pay, interactive voice response, and point of sale services. It serves customers primarily operating in the personal loans, automotive loans, receivables management, and business-to-business verticals through direct sales representatives and software integration partners. The company was founded in 2006 and is headquartered in Atlanta, Georgia.