Reviewing DLocal (NASDAQ:DLO) & Alight (NYSE:ALIT)

DLocal (NASDAQ:DLO) and Alight (NYSE:ALIT) are both mid-cap business services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, valuation, analyst recommendations and dividends.

Analyst Recommendations

This is a breakdown of recent ratings for DLocal and Alight, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DLocal	0	5	3	0	2.38
Alight	0	0	7	0	3.00

DLocal currently has a consensus price target of $18.38, indicating a potential upside of 27.69%. Alight has a consensus price target of $12.71, indicating a potential upside of 38.50%. Given Alight’s stronger consensus rating and higher possible upside, analysts plainly believe Alight is more favorable than DLocal.

Valuation and Earnings

This table compares DLocal and Alight’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DLocal	$650.35 million	6.55	$148.96 million	$0.49	29.37
Alight	$3.41 billion	1.52	-$345.00 million	($0.55)	-16.69

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

Risk and Volatility

DLocal has a beta of 0.96, meaning that its stock price is 4% less volatile than the S&P 500. Comparatively, Alight has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500.

Insider and Institutional Ownership

90.1% of DLocal shares are held by institutional investors. Comparatively, 96.7% of Alight shares are held by institutional investors. 45.4% of DLocal shares are held by insiders. Comparatively, 4.0% of Alight shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
DLocal	22.92%	40.57%	17.13%
Alight	-7.80%	5.09%	2.30%

Summary

DLocal beats Alight on 9 of the 14 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 Alight

Alight, Inc. provides cloud-based integrated digital human capital and business solutions worldwide. The company operates through two segments, Employer Solutions and Professional Services. The Employer Solutions segment offers employee wellbeing, integrated benefits administration, healthcare navigation, financial wellbeing, leave of absence management, retiree healthcare and payroll; and operates AI-led capabilities software. The Professional Services segment offers consulting offerings, such as cloud advisory, deployment, and optimization services for cloud platforms. The company provides Alight Worklife, an intuitive, cloud-based employee engagement platform. Its solutions enable employees to enrich their health, wealth, and wellbeing that helps organizations achieve a high-performance culture. Alight, Inc. was founded in 2020 and is based in Lincolnshire, Illinois.