Head to Head Review: DLocal (NASDAQ:DLO) versus Etsy (NASDAQ:ETSY)

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

Insider and Institutional Ownership

99.5% of Etsy shares are owned by institutional investors. Comparatively, 90.1% of DLocal shares are owned by institutional investors. 2.6% of Etsy shares are owned by company insiders. Comparatively, 45.4% of DLocal shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Etsy	$2.77 billion	2.19	$307.57 million	$2.19	23.70
DLocal	$707.64 million	3.63	$148.96 million	$0.44	19.70

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

Risk & Volatility

Etsy has a beta of 1.97, indicating that its stock price is 97% more volatile than the S&P 500. Comparatively, DLocal has a beta of 0.76, indicating that its stock price is 24% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Etsy	10.36%	-51.94%	12.29%
DLocal	18.76%	34.35%	13.95%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Etsy and DLocal, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Etsy	4	12	7	1	2.21
DLocal	0	7	2	0	2.22

Etsy presently has a consensus target price of $70.22, suggesting a potential upside of 37.41%. DLocal has a consensus target price of $12.50, suggesting a potential upside of 44.51%. Given DLocal’s stronger consensus rating and higher possible upside, analysts plainly believe DLocal is more favorable than Etsy.

Summary

Etsy beats DLocal on 8 of the 15 factors compared between the two stocks.

About Etsy

Etsy, Inc., together with its subsidiaries, operates two-sided online marketplaces that connect buyers and sellers in the United States, the United Kingdom, Germany, Canada, Australia, and France. Its primary marketplace is Etsy.com that connects artisans and entrepreneurs with various consumers. The company also offers Reverb, a musical instrument marketplace; Depop, a fashion resale marketplace; and Elo7, a Brazil-based marketplace for handmade and unique items. In addition, it offers various seller services, including Etsy Payments, a payment processing service; Etsy Ads, an advertising platform; and Shipping Labels, which allows sellers in the United States, Canada, the United Kingdom, Australia, and India to purchase discounted shipping labels. Further, the company provides the Etsy Purchase Protection program that is designed to help buyers; the Etsy Share and Save program for sellers to save on Etsy fees for sales that drive to their Etsy shop from their own channels. Additionally, it offers educational resources comprising blog posts, video tutorials, Etsy Seller Handbook, Etsy.com online forums, and insights; Etsy Teams, a platform to build personal relationships with other Etsy sellers; and a Star Seller program. The company was formerly known as Indieco, Inc changed its name to Etsy, Inc. in June 2006. Etsy, Inc. was founded in 2005 and is headquartered in Brooklyn, New York.

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.