5/14/24 - $dlo - treacherous but long into print, good R/R
5/14/24 - vrockstar -
DLO
- tough biz to underwrite, let's get that clear. accusations. new mgmt. in some weird regions (that's the biz fam). competition in some well-established players ayden MT? ... but into the print, i think this is one that's setting up for a miss and realistically the downside here is probably 15-20% and the upside is equal AND it's a name that with the right bottom in, will be a set and forget (forever?) style name. they generate a ton of cash, have a lot of room to grow with key accounts. the 40% pa. growth for next 2 yr is real. nearly 20x PE not cheap for complicated story w/ rough FX geo's... but a beat here puts the bogey not on '24 at 70c but '25 which probably goes to $1.25 and stock will trade at 25-30x on this (like other scaling payments names). assume 25x on 1.25 and that's a $31/shr stock - where it peaked out after the new ceo (from
MELI
) joined. discounted back that's ~$25/shr today at 25% Ke.
basically you're risk-positive money in my estimation to buy under $15 and the closer we get to $10 you can size up large assuming there are no fundamental issues - as could always be the case today as we've learned from many co's reporting.
i've taken a long into the print with about 50% of the size i'd like (overall/ not just to play prints), and i'll size it up hard on a dip all else equal of 10-15% and i'm full position at a down around $10-10.5/shr.
assuming we do see upside (and mind the short interest is reasonably high)... this is a great stock to rent with high IV and a lot of non-believers.
DLO
- tough biz to underwrite, let's get that clear. accusations. new mgmt. in some weird regions (that's the biz fam). competition in some well-established players ayden MT? ... but into the print, i think this is one that's setting up for a miss and realistically the downside here is probably 15-20% and the upside is equal AND it's a name that with the right bottom in, will be a set and forget (forever?) style name. they generate a ton of cash, have a lot of room to grow with key accounts. the 40% pa. growth for next 2 yr is real. nearly 20x PE not cheap for complicated story w/ rough FX geo's... but a beat here puts the bogey not on '24 at 70c but '25 which probably goes to $1.25 and stock will trade at 25-30x on this (like other scaling payments names). assume 25x on 1.25 and that's a $31/shr stock - where it peaked out after the new ceo (from
MELI
) joined. discounted back that's ~$25/shr today at 25% Ke. basically you're risk-positive money in my estimation to buy under $15 and the closer we get to $10 you can size up large assuming there are no fundamental issues - as could always be the case today as we've learned from many co's reporting.
i've taken a long into the print with about 50% of the size i'd like (overall/ not just to play prints), and i'll size it up hard on a dip all else equal of 10-15% and i'm full position at a down around $10-10.5/shr.
assuming we do see upside (and mind the short interest is reasonably high)... this is a great stock to rent with high IV and a lot of non-believers.
Comment:
#woof. a long explanation in the ER about "why this quarter sucked". i've averaged down a bit, but have a hard time getting large here, unfortunately. this ticker could test single digits unless the call changes things (low probability). if i didn't own it... i'd probably wait. i added a bit around $11 but hard to go larger on this print.
Comment:
one of the worst conf calls i've listened to in a while and i've listened to a LOT of these.
a. large customer renegotiating contract means profitability over hang is... TBD
b. mgmt unwilling to walk thru guidance... so not even clear they can meet low end or at least they can't explain the moving pieces (i'd guess they don't even know)
c. stock will need at minimum two more quarters to find some sort of obvious bid b/c there's too much guess work that goes into modeling the right '24 figures nevermind '25.
d. did re-engage the stock below $10 here, but it would not surprise me if there's another 20-30% to go in the next 3-4 months. i remain confident in the 50% TPV growth, the product market fit... but street/ institutions don't need to own this right away so it comes down to trying to time bottom which is risky.
e. yuck, again... tough sled.
a. large customer renegotiating contract means profitability over hang is... TBD
b. mgmt unwilling to walk thru guidance... so not even clear they can meet low end or at least they can't explain the moving pieces (i'd guess they don't even know)
c. stock will need at minimum two more quarters to find some sort of obvious bid b/c there's too much guess work that goes into modeling the right '24 figures nevermind '25.
d. did re-engage the stock below $10 here, but it would not surprise me if there's another 20-30% to go in the next 3-4 months. i remain confident in the 50% TPV growth, the product market fit... but street/ institutions don't need to own this right away so it comes down to trying to time bottom which is risky.
e. yuck, again... tough sled.