Is DLocal Ltd. overvalued or undervalued?

As of 10 March 2025, the valuation grade for DLocal Ltd. has moved from expensive to attractive, indicating a shift in perception regarding its market value. The company is currently considered undervalued, with a P/E ratio of 35, which is competitive compared to peers like BlackLine, Inc. at 34.03 and PowerSchool Holdings, Inc. with a risky valuation and a significantly negative P/E. Additionally, DLocal's EV to EBITDA stands at 15.22, while BlackLine's is much higher at 45.42, further supporting the notion of undervaluation.
DLocal's ROE is reported at 17.41%, reflecting a solid return on equity despite the challenges indicated by its negative capital employed. The company has also outperformed the S&P 500 over the past year, with a return of 37.17% compared to the index's 10.26%. Overall, the combination of attractive valuation metrics and strong performance relative to peers suggests that DLocal Ltd. is indeed undervalued in the current market.