Nu Holdings Ltd. offers a compelling entry point due to its significant growth potential in Latin America and recent stock dip. When looking past currency fluctuations, the digital bank achieved 50% revenue, highlighting strong underlying performance. Nu Holdings' low-cost structure and profitability, with $2 billion net income and efficient customer acquisition, underscore its financial strength.
Despite having a market cap of more than $50 billion, Nu Holdings (NU -4.17%) might not be a familiar business to many investors in the U.S. That's because its operations are in Brazil, Mexico, and Colombia.
Investing in Brazilian stocks, like Nu Holdings, requires vigilance due to macroeconomic volatility and the necessity of managing risk and margin of safety. Nu Holdings, despite trading at premium multiples, offers strong growth potential with high ROE and expanding market share in Brazil and Latin America. Risks include high-interest rates, potential regulation changes, and a high-risk credit portfolio, which could impact ROE and overall financial performance.
Nu Holdings continues to grow rapidly with 114 million customers, but recent financial results were disappointing due to rising credit losses and currency depreciation. The 7% delinquency rate has raised investor concerns about risk management amid aggressive loan expansion. A sharp fall in the Brazilian Real hurt USD-reported results, though Brazil's economy remains fundamentally strong.
A weakening Brazilian Real has paused the positive momentum of Nu Holdings. Nonetheless, Nu keeps performing excellently by growing customers, revenue, and profit margins. The valuation looks attractive considering the growth trajectory that's ahead with a PEG ratio at 0.3x.
Given the recent surge in Nu Holdings shares, we evaluate the stock's current position to determine whether it presents a good investment opportunity.
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The latest trading day saw Nu Holdings Ltd. (NU) settling at $11.62, representing a +1.93% change from its previous close.
The market's having a wild ride so far in 2025, and the S&P 500 briefly entered correction territory last week before swinging back up. For new investors, it could be a scary time.
Nu (NU) has been one of the stocks most watched by Zacks.com users lately. So, it is worth exploring what lies ahead for the stock.
Nu Holdings (NU 9.12%) stock has tested investors' nerves amid a volatility roller coaster. From a spectacular 155% two-year return between 2023 and 2024, shares of the financial technology (fintech) giant, recognized as Latin America's largest digital bank, are currently down approximately 37% from their 52-week high.