Nu Holdings Ltd., a leading Brazilian fintech, shows impressive growth with a strong earnings report despite recent stock price dips. With over 50% of Brazil’s adult population using its services and plans for expansion into other Latin American countries, the company remains a potential investment opportunity. Analysts suggest holding the stock, with a possible upside of 46% from current levels, making it one to watch.
As of the close of the first quarter of 2025, the S&P 500 is underperforming compared to several foreign and emerging markets, particularly in Latin America. This trend presents a unique opportunity for investors interested in undervalued foreign companies, notably Nu Holdings Ltd. (NYSE: NU), a leading fintech in the region. With its stock at critical support levels and strong earnings metrics, Nu Holdings might be an appealing choice for investors seeking growth beyond the U.S.
Nu Holdings, established in 2013, is the largest fintech in Latin America and operates as a Brazilian online bank. It has introduced various financial products such as NuConta, a digital account, international credit cards, personal loans, life insurance, and investment services. Notably, its user-friendly mobile app sets it apart in the competitive fintech landscape, where it rivals companies like Square and PayPal.
Currently, Nu Holdings has penetrated over 50% of Brazil’s adult population, indicating nearing user saturation; however, revenue growth potential remains strong. Older customers provide about $25 monthly revenue, while newer users generate $10. As newer customers utilize more services, organic revenue is expected to grow. Nu is also expanding into Mexico and Colombia, targeting a broader Latin American market, which has a combined population exceeding 660 million and significant long-term potential.
In its Q4 2024 earnings release on February 20, 2025, Nu Holdings posted impressive results despite slightly missing some analyst expectations. Revenue reached $2.99 billion, marking a 58% year-over-year growth in constant currency, although impacted by the depreciation of the Brazilian Real. The company reported net income of $552.64 million, with earnings per share of $0.11 and a strong customer growth of 4.5 million in the quarter, reaching a total of 114.2 million.
With its stock recently down 34% from a yearly peak, Nu Holdings currently trades at a forward P/E of 13.67, indicating potential value. The stock’s RSI of 38 suggests oversold conditions, indicating a possible entry point for long-term investors. Currently rated a Hold by analysts, the consensus price target of $15.47 anticipates a potential upside of 46% from its recent closing price, making it a fintech stock to monitor closely for growth opportunities.
Nu Holdings, as a thriving fintech in Latin America, presents significant investment opportunities, particularly in light of its impressive revenue growth and user expansion. Despite market fluctuations affecting its stock, its valuation metrics indicate potential upside. As the company broadens its reach into other Latin American markets, investors who are seeking exposure in this high-growth sector might find Nu Holdings a compelling consideration for their portfolio.
Original Source: www.tradingview.com
