Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Bottom-Up

<ul><li>DLocal's Q2 2024 earnings report indicates a complex blend of growth, challenges, and strategic adaptation amid volatile market conditions.</li><li>The company reported a significant achievement with its Total Payment Volume (TPV) reaching $6 billion, depicting a strong year-on-year growth of 38% despite a high comparative in the previous year.</li><li>This growth attests to DLocal's ongoing capability to deepen relationships with existing global merchants and to attract new ones, contributing positively toward its long-term expansion prospects.</li></ul>

DLocal's Q2 2024 earnings report indicates a complex blend of growth, challenges, and strategic adaptation amid volatile market conditions.The company reported a significant achievement with its Total Payment Volume (TPV) reaching $6 billion, depicting a strong year-on-year growth of 38% despite a high comparative in the previous year.This growth attests to DLocal's ongoing capability to deepen relationships with existing global merchants and to attract new ones, contributing positively toward its long-term expansion prospects.

DLocal Limited: Initiation Of Coverage - Continuous TPV Growth and Market Expansion As A Critical Growth Lever! - Major Drivers

Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

<ul>
<li>Our negative recommendations from December – especially Paytm – worked better than our positive ones, given 1Q22 market conditions; we see much value in payment companies but we remain selective</li>
<li>Based on our screens, we continue to favour Mastercard in the megacaps, we stick with PagSeguro and Getnet, adding Nexi which looks very oversold, despite its fundamental headwinds</li>
<li>We take Paytm off the sell list, but we remain negative on DLocal on its very demanding valuations, and we add Kakao Pay to the negative list</li>
</ul>


Our negative recommendations from December – especially Paytm – worked better than our positive ones, given 1Q22 market conditions; we see much value in payment companies but we remain selective
Based on our screens, we continue to favour Mastercard in the megacaps, we stick with PagSeguro and Getnet, adding Nexi which looks very oversold, despite its fundamental headwinds
We take Paytm off the sell list, but we remain negative on DLocal on its very demanding valuations, and we add Kakao Pay to the negative list


Payment Companies – Thoughts on Screen Snapshots 1Q22

<ul>
<li>We update Klarna’s and Stripe’s IPO valuations based on recent share transactions; Indian payments company Pine Labs is also reported to be looking to IPO</li>
<li>Our 2Q24 recommended shares performance was very mixed, with it being a mainly challenging quarter for long investors in payment companies</li>
<li>We retain Visa as a core holding and also keep PagSeguro and Shift4 as buys, replacing PayPal with European value play Nexi; we keep our sell rating on Affirm</li>
</ul>


We update Klarna’s and Stripe’s IPO valuations based on recent share transactions; Indian payments company Pine Labs is also reported to be looking to IPO
Our 2Q24 recommended shares performance was very mixed, with it being a mainly challenging quarter for long investors in payment companies
We retain Visa as a core holding and also keep PagSeguro and Shift4 as buys, replacing PayPal with European value play Nexi; we keep our sell rating on Affirm


Payment Companies – Updated Sector Overview and Potential IPOs

Event-Driven

<ul>
<li>We explore Klarna’s and Stripe’s IPO prospects and valuations based on recent share transactions; Nuvei and Cielo are close to being taken private, with Worldpay now controlled by private equity</li>
<li>Nuvei and Worldpay both grew by acquisition but failed to deliver on the market’s expected returns, in our view, ending up under PE ownership; is Nexi a potential PE target?</li>
<li>We retain Visa as a core holding and also keep PagSeguro and PayPal as buys, replacing Cielo with new peer group addition Shift4; we keep our sell rating on Affirm</li>
</ul>


We explore Klarna’s and Stripe’s IPO prospects and valuations based on recent share transactions; Nuvei and Cielo are close to being taken private, with Worldpay now controlled by private equity
Nuvei and Worldpay both grew by acquisition but failed to deliver on the market’s expected returns, in our view, ending up under PE ownership; is Nexi a potential PE target?
We retain Visa as a core holding and also keep PagSeguro and PayPal as buys, replacing Cielo with new peer group addition Shift4; we keep our sell rating on Affirm


Payment Companies – Potential IPOs, Select Companies Being Taken Private and Sector Overview

<ul>
<li>In 2H23 our longs Visa and PagSeguro delivered positive returns, whilst PayPal was in negative territory; among our shorts, Kakao Pay was modestly successful, DLocal and Affirm continued to appreciate</li>
<li>We retain card network megacap Visa as a core holding, and keep PagSeguro and PayPal adding Cielo to the buy list</li>
<li>We keep our negative views on DLocal and Affirm, and remove Kakao Pay from the sell list for its less marked price-to-sales multiple valuation</li>
</ul>


In 2H23 our longs Visa and PagSeguro delivered positive returns, whilst PayPal was in negative territory; among our shorts, Kakao Pay was modestly successful, DLocal and Affirm continued to appreciate
We retain card network megacap Visa as a core holding, and keep PagSeguro and PayPal adding Cielo to the buy list
We keep our negative views on DLocal and Affirm, and remove Kakao Pay from the sell list for its less marked price-to-sales multiple valuation


Payment Companies – Our High Conviction Calls for 1H 2024

United States

DLocal Limited of Uruguay provides payment solutions. The Company offers single payment platform which accept payments, send payouts, and settle funds. DLocal serves customers worldwide.

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DLocal (DLO US)

DLocal Limited: Initiation Of Coverage - Continuous TPV Growth and Market Expansion As A Critical Growth Lever! - Major Drivers

DLocal's Q2 2024 earnings report indicates a complex blend of growth, challenges, and strategic adaptation amid volatile market conditions. The...

Baptista Research

Payment Companies – Thoughts on Screen Snapshots 1Q22

We favour Mastercard, PagSeguro and Getnet, adding Nexi which looks very oversold; we take Paytm off the sell list, but stay negative on DLocal due...

Victor Galliano

Payment Companies – Updated Sector Overview and Potential IPOs

Mixed 2Q24 shares performance, challenging for long investors in payment companies. Visa retained as core holding, with buys PagSeguro and Shift4;...

Victor Galliano

Payment Companies – Potential IPOs, Select Companies Being Taken Private and Sector Overview

In payments, PagSeguro, Visa, PayPal and Shift4 are buys while Affirm remains a sell. Klarna and Stripe prep for their IPOs, Nuvei and Cielo are...

Victor Galliano

Payment Companies – Our High Conviction Calls for 1H 2024

In payments, we stick with Visa, PayPal and PagSeguro, adding Cielo to the buy list; we remain negative on DLocal and Affirm, removing Kakao Pay...

Victor Galliano

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