Is DLocal (DLO) a High-Conviction Buy for Emerging Market Fintech Growth in 2026?

The fintech sector in emerging markets has long been a magnet for investors seeking high-growth opportunities, and dLocal (DLO) has emerged as a standout player in this space. With a 2025 analyst ratings surge, strategic partnerships accelerating cross-border commerce, and robust financial performance, the question for 2026 is whether dLocal warrants a high-conviction buy. This analysis evaluates the company's trajectory through the lens of institutional sentiment, operational expansion, and macroeconomic tailwinds.

Analyst Upgrades Signal Institutional Confidence

In late 2025, dLocal's stock ratings saw a notable shift, with multiple top-tier analysts upgrading their outlooks. The consensus rating now stands at "Buy," supported by an average price target of $15.80-a 11.74% projected increase from its current valuation according to analysts. Goldman Sachs and Citigroup led the charge, with Goldman upgrading from "Hold" to "Strong Buy" and setting a $19.00 price target according to reports. Itau BBA's $21.00 target, the highest among analysts, underscores optimism about dLocal's ability to capitalize on e-commerce growth and digital infrastructure expansion in Latin America, its core market according to data.

This institutional backing is not merely speculative. dLocal's business model-focused on payment processing and localized financial solutions in emerging economies-aligns with structural trends. As emerging markets account for 60% of global e-commerce growth, dLocal's role as a bridge between global merchants and local consumers positions it to benefit from this shift.

Strategic Partnerships as Growth Catalysts

dLocal's 2025 expansion strategy has been defined by partnerships that amplify its cross-border capabilities. A key collaboration with Convera enables faster, compliant payouts in markets like Colombia, with plans to scale across Africa, Asia, and Latin America. This partnership addresses a critical pain point for global businesses: navigating fragmented regulatory environments while ensuring cost-effective transactions.

Another pivotal alliance is with Bolt, a European mobility platform. By integrating dLocal's API, Bolt can now deploy localized alternative payment methods (APMs) in markets such as Ghana, Kenya, and Thailand. This not only enhances user adoption but also strengthens dLocal's position as a go-to infrastructure provider for global enterprises. Similarly, the partnership with Yuno in 2026 simplifies market entry for merchants into regions like Morocco, leveraging dLocal's deep regulatory expertise.

These collaborations are not isolated wins. They reflect a broader strategy to dominate the "Global South" payments ecosystem. As dLocal's CEO noted in a 2025 earnings call, "Our partnerships are about solving the last-mile problem for global commerce in emerging markets."

Financial Performance and Long-Term Outlook

dLocal's Q1 2025 results underscore its operational strength. Total Payment Volume surged to $8.1 billion, a 53% year-over-year increase, while revenue grew 18% to $216.8 million. Adjusted EBITDA hit $57.9 million, reflecting a 57% YoY jump, and free cash flow expanded 200% to $39.7 million. These metrics, though partially offset by merchant concentration risks and seasonal fluctuations, highlight a resilient business model.

Looking ahead, analysts project annual revenue growth of 21% and earnings growth of 22.7% through 2026. While Q1 2026 data remains unavailable, dLocal's Q3 2025 TPV of $10.4 billion-a 59% YoY increase-suggests momentum is intact. The company's foray into stablecoins and AI-driven payment optimization further insulates it from short-term volatility.

Risks and Considerations

Despite the bullish case, risks persist. Emerging markets are inherently volatile, with currency fluctuations and regulatory shifts posing challenges. Additionally, dLocal's reliance on a few large merchants means any client attrition could impact TPV. However, the company's diversified partner ecosystem and expanding product suite mitigate these risks.

Conclusion: A High-Conviction Buy?

For investors with a 12- to 18-month horizon, dLocal presents a compelling case. The combination of analyst upgrades, strategic partnerships, and financial resilience positions it to outperform in a sector poised for explosive growth. While short-term volatility is inevitable, the long-term trajectory toward multi-year highs by mid-2026 justifies a high-conviction buy rating.

In the words of one analyst: dLocal is not just a fintech play-"it's a gateway to the next frontier of global commerce."