Avoid legacy giants Visa (V) and Mastercard (MA) at current levels, as extreme valuation premiums and long-term blockchain disruption make mega-cap tech leaders like NVIDIA (NVDA) and Microsoft (MSFT) more compelling alternatives. Stay on the sidelines for point-of-sale and regional fintech processors Toast (TOST), Shift4 Payments (FOUR), and DLocal (DLO) until valuations drop to better compensate for industry headwinds. Pass on StoneCo (STNE) at current pricing, looking instead toward cheaper growth platforms like Hims & Hers (HIMS) or waiting for STNE to fall closer to a 0.1 EV/GP/RG multiple. Place cross-border remittance leader Remitly Global (RELY) on your watchlist, preparing to establish a position if its valuation pulls back to a 0.1 EV/GP/RG multiple. Finally, wait for a broader market pullback before buying Circle (CRCL), targeting an entry point when the stock retreats to the high $50s to low $60s range.

DLocal (DLO)

• DLocal currently trades at an Enterprise Value to Gross Profit over Revenue Growth (EV/GP/RG) multiple of 0.2 with a Rule of 40 score of 58.
• The business serves a useful niche by bridging global e-commerce merchants with disparate payment systems across emerging markets in Latin America and Africa.
• The stock has historically faced sharp volatility, repeatedly falling by up to 50% following short-seller reports.
• Long-term terminal value is threatened by the eventual adoption of blockchain and stablecoin payments over the next decade.

Takeaways

• While fundamentally stronger than some peers, the stock is not cheap enough compared to alternative opportunities in cloud, AI, and memory sectors.
• Avoid or wait for a significantly lower valuation multiple before considering an entry.

StoneCo (STNE)

• StoneCo is currently trading at an EV/GP/RG multiple of 0.24.
• While underlying operating numbers appear stable, the valuation is unappealing when compared to alternative foreign tech and e-commerce platforms like Kaspi.kz (trading at 0.09) or Hims & Hers (HIMS) (trading at 0.1).
• Like other regional payment processors, the company has previously been targeted by short-seller reports and faces long-term disruption risks.

Takeaways

• Pass on the stock at current prices; wait for a deeper discount (closer to a 0.1 multiple) before entering.

Shift4 Payments (FOUR)

• Shift4 remains exposed to the same structural and competitive headwinds facing the broader payments sector.
• The company has previously been targeted by short-seller reports.
• Valuation multiples remain elevated compared to deep-value opportunities elsewhere in the market.

Takeaways

• Stay on the sidelines until the valuation compresses to levels that compensate for long-term fintech disruption risks.

Visa (V) & Mastercard (MA)

• Both legacy payment giants trade at extreme valuation premiums, appearing more expensive than major mega-cap tech companies such as Microsoft (MSFT), NVIDIA (NVDA), and Meta Platforms (META).
• High valuations appear to be supported primarily by index-tracking inertia (passive ETF inflows) and aggressive corporate share buybacks rather than fundamental growth prospects.
• Long-term revenue models rely on transaction "tolls" that are vulnerable to disruption by mobile-first blockchain and stablecoin rails over a 5-to-10-year horizon.

Takeaways

• Avoid buying at current prices; the premium valuation offers little margin of safety if payment disruption materializes.
• Do not rely solely on share repurchases as a thesis for long-term outperformance.

Remitly Global (RELY)

• Remitly is viewed as a best-in-class operator in cross-border consumer remittances.
• Growth has moderated to 23%, causing the company to fall short of the Rule of 40 benchmark.
• The stock has expanded from an EV/GP/RG of 0.1 (levels seen late last year) up to roughly 0.2.

Takeaways

• Monitor the stock for a pullback toward the 0.1 valuation multiple before establishing a position.
• Re-evaluate if revenue growth re-accelerates to justify current pricing.

Circle (CRCL)

• Circle became an attractive risk/reward play when it previously pulled back to the high $50s / low $60s (trading at an EV/GP/RG of 0.2 with a Rule of 40 score of 104) during market panic over the OUSD consortium.
• The asset has since rallied sharply alongside the broader cryptocurrency market, making it less attractive at current price levels.
• Potential interest rate hikes (e.g., September) or general risk-off sentiment in crypto could create downside pressure.

Takeaways

• Wait for a market-wide crypto pullback or macro-driven sell-off to buy at a lower valuation.
• Look for valuation metrics to return toward an EV/GP/RG of 0.2 before initiating a new position.

Toast (TOST)

• Toast remains the leading point-of-sale and enterprise management platform for the U.S. restaurant sector, outgrowing most legacy competitors.
• Despite strong market share, the stock trades at an expensive valuation that does not satisfy the Rule of 40.

Takeaways

• Avoid purchasing at current levels; high-growth technology alternatives (such as leading semiconductor or AI names) offer better growth-adjusted valuations.