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Nu Holdings (NU)
NYSE:NU
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Nu Holdings
(NYSE:NU)
78Outperform
Positive Factors
Credit Growth
Credit growth exceeded expectations across all categories, directly challenging the bear narrative that credit cards and unsecured loans have already peaked.
Market Positioning
Nubank is uniquely positioned to build one of the largest and most valuable banking franchises in Latin America, supported by world-class technology, exceptional customer satisfaction, market-leading pricing, and strong unit economics.
Negative Factors
Interest Rates Impact
Brazil's deteriorating rate curve negatively impacted the present value of card receivables, affecting credit card interest income by approximately US$64 million.
Market Share Concerns
Some believe NU has already maxed out its credit market share, especially in credit cards and unsecured loans, and lacks a clear edge in high-income segments or the increasingly crowded payroll loan space.
Nu Holdings (NU) vs. S&P 500 (SPY)
Market Cap
$63.12B
Dividend YieldN/A
Average Volume (3M)55.57M
Price to Earnings (P/E)29.2
Beta (1Y)1.23
Revenue Growth33.20%
EPS Growth68.47%
CountryUS
Employees5,403
SectorFinancial
Sector Strength87
IndustryBanks - Diversified
Share Statistics
EPS (TTM)0.11
Shares Outstanding3,768,057,900
10 Day Avg. Volume57,991,481
30 Day Avg. Volume55,574,128
Financial Highlights & Ratios
PEG Ratio2.33
Price to Book (P/B)6.49
Price to Sales (P/S)0.00
P/FCF Ratio20.67
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$14.42Price Target Upside10.08% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
Nu Holdings Business Overview & Revenue Model
Company DescriptionNu Holdings Ltd. operates as a digital financial services platform and technology company primarily in Brazil, Mexico, and Colombia. It offers Nu credit and debit cards; Ultraviolet credit and debit cards; and mobile payment solutions for NuAccount customers to make and receive transfers, pay bills, and make everyday purchases through their mobile phones. The company provides savings solutions, such as Nu Personal Accounts, a digital account solution that supports all personal finance activities, from daily purchases and money transfers to savings; and Nu business accounts designed specifically for entrepreneur customers and their businesses. In addition, it offers NuInvest, an investment product that provides equity, fixed-income, options, and ETF products, as well as multimarket funds with curated asset allocations based on the customer's risk profile and financial position; personal unsecured loans; in-app buy now pay later' solution for Nu card customers to pay credit and debit purchases, and banking payment slips over time in up to twelve installments; and NuInsurance protecting solutions to help its customers secure life insurance and funeral benefits. The company was founded in 2013 and is headquartered in Sao Paulo, Brazil.
How the Company Makes MoneyNu Holdings generates revenue primarily through its suite of financial products and services. Key revenue streams include interest income from credit card balances and personal loans, interchange fees from card transactions, and fees from its investment and insurance products. The company also benefits from partnerships with other financial institutions and service providers to enhance its product offerings. Additionally, Nu Holdings leverages its extensive customer base to cross-sell various financial products, increasing their lifetime value. A significant factor contributing to its earnings is its low-cost digital platform, which enables efficient scaling and customer acquisition across Latin America.
Nu Holdings Key Performance Indicators (KPIs)
Any
Total Customers
Counts the total number of customers, showing the company’s market reach and potential for cross-selling opportunities.
Counts the total number of customers, showing the company’s market reach and potential for cross-selling opportunities.
Data provided by:
Main Street Data
Main Street DataNu Holdings Financial Statement Overview
Summary
Nu Holdings exhibits a strong financial position with substantial revenue growth, improved profitability, and effective cash flow management. The company shows resilience and growth potential, supported by a stable balance sheet and robust cash generation.Income Statement
Nu Holdings has demonstrated robust revenue growth, with Total Revenue increasing significantly over the years. The Gross Profit Margin is strong at 100%, indicating efficient cost management. The Net Profit Margin has improved, reflecting a positive trajectory from previous losses to substantial profitability. EBIT and EBITDA margins are healthy, showcasing effective operational performance.85
Very Positive
Balance Sheet
The company maintains a solid balance sheet with a manageable Debt-to-Equity Ratio. The Return on Equity has seen improvement, highlighting enhanced shareholder value. The Equity Ratio indicates a reasonable proportion of equity financing, signifying stability. However, vigilance is advised due to the banking industry's inherent exposure to financial fluctuations.78
Positive
Cash Flow
Nu Holdings exhibits positive Free Cash Flow growth, indicating strong cash generation capabilities. The Operating Cash Flow to Net Income Ratio is robust, demonstrating efficient cash conversion from earnings. The Free Cash Flow to Net Income Ratio supports sustainable operations and potential reinvestment opportunities.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 11.52B | 8.03B | 4.79B | 1.70B | 737.13M | Gross Profit |
| 5.25B | 3.49B | 1.66B | 732.92M | 326.91M | EBIT |
| 2.80B | 1.54B | -308.90M | -170.16M | -193.18M | EBITDA |
| 2.87B | 1.60B | -273.32M | -152.82M | -185.75M | Net Income Common Stockholders |
| 1.97B | 1.03B | -364.58M | -164.99M | -171.49M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 9.19B | 0.00 | 4.17B | 2.71B | 2.34B | Total Assets |
| 49.93B | 43.35B | 29.92B | 19.86B | 10.15B | Total Debt |
| 1.73B | 1.17B | 558.75M | 135.72M | 384.44M | Net Debt |
| -7.46B | -12.20B | -3.61B | -2.57B | -1.96B | Total Liabilities |
| 42.28B | 36.94B | 25.03B | 15.42B | 9.72B | Stockholders Equity |
| 7.65B | 6.41B | 4.89B | 4.44B | 438.11M |
| Cash Flow | Free Cash Flow | |||
| 2.39B | 1.09B | 641.27M | -2.95B | 969.18M | Operating Cash Flow |
| 2.40B | 1.27B | 755.57M | -2.92B | 977.17M | Investing Cash Flow |
| -330.63M | -177.00M | -127.15M | -154.19M | -16.27M | Financing Cash Flow |
| 727.74M | 425.21M | 654.04M | 3.34B | 237.46M |
Nu Holdings Technical Analysis
Positive
13.10
Price Trends
11.54
Positive
11.70
Positive
12.68
Positive
Market Momentum
0.48
Positive
58.22
Neutral
45.08
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NU, the sentiment is Positive. The current price of 13.1 is above the 20-day moving average (MA) of 12.58, above the 50-day MA of 11.54, and above the 200-day MA of 12.68, indicating a bullish trend. The MACD of 0.48 indicates Positive momentum. The RSI at 58.22 is Neutral, neither overbought nor oversold. The STOCH value of 45.08 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NU.
Nu Holdings Risk Analysis
Nu Holdings disclosed 1 risk factors in its most recent earnings report. Nu Holdings reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Nu Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $118.00B | 8.34 | 13.25% | 2.17% | 0.27% | 19.44% | |
78 Outperform | $63.12B | 29.19 | 27.91% | ― | 33.20% | 68.47% | |
77 Outperform | $54.92B | 9.10 | 13.70% | 3.94% | 18.85% | 14.85% | |
75 Outperform | $66.83B | 10.11 | 11.92% | 4.69% | 4.07% | 9.97% | |
74 Outperform | $61.61B | 8.83 | 9.36% | 2.40% | 11.33% | 47.74% | |
73 Outperform | $86.10B | 7.77 | 19.22% | 4.18% | 30.24% | 28.90% | |
64 Neutral | $12.82B | 9.87 | 7.67% | 17000.34% | 12.39% | -5.85% |
* Financial Sector Average
Performance Comparison
NU
Nu Holdings
13.10
1.08
8.99%
BBVA
Banco Bilbao
15.57
5.29
51.46%
BCS
Barclays
17.85
7.01
64.67%
ING
ING Groep
21.56
4.67
27.65%
NWG
NatWest Group
13.86
6.06
77.69%
SAN
Banco Santander SA
7.84
2.78
54.94%
Nu Holdings Earnings Call Summary
Earnings Call Date:May 13, 2025
(Q1-2025)
| % Change Since: -0.30%|
Next Earnings Date:Aug 14, 2025
Earnings Call Sentiment Positive
The earnings call reflects strong customer growth and expansion, particularly in Mexico, along with significant improvements in operating efficiency and net income. However, there are challenges related to credit loss allowance increases and funding cost pressures in emerging markets.Q1-2025 Updates
Positive Updates
Strong Customer Growth
NU Holdings added 4.3 million customers in Q1 2025, reaching a total of 119 million across all markets, with significant increases in Brazil, Mexico, and Colombia.
Expansion in Mexico
Customer base in Mexico grew by 70% over the past four quarters, with deposits exceeding $5 billion and revenues reaching $245 million.
Record Loan Origination
Total loan originations hit a record $20.2 billion, increasing by 64% year-over-year, driven by strong unsecured loan performance.
Operating Efficiency Improvement
Efficiency ratio improved to 24.7%, a 740 basis point improvement year-over-year, showcasing operational efficiencies.
Net Income Growth
Net income increased by 74% year-over-year, reaching $557 million, with an annualized ROI of 27%.
New Banking License in Mexico
NU Holdings received a banking license in Mexico, which will accelerate growth and product offerings.
Negative Updates
Credit Loss Allowance Increase
Higher credit loss allowance in Q1 impacted gross profit margins, leading to a 3% sequential decline in gross profit.
Seasonal NPL Increase
NPLs in the 15 to 90-day category increased by 60 basis points to 4.7%, reflecting typical Q1 seasonality.
Funding Cost Pressure in Mexico and Colombia
Investments in building local deposit franchises in Mexico and Colombia led to short-term pressure on net interest margins.
Company Guidance
During the first quarter of 2025, NU Holdings reported significant growth and expansion, adding 4.3 million customers to reach a total of 119 million across Brazil, Mexico, and Colombia. In Brazil, they now serve approximately 59% of the adult population, with 85% of these customers being active users. NU Holdings also achieved a monthly active customer activity ratio above 83%, reflecting deep engagement. In Mexico, customer growth surged by 70% over the past four quarters, reaching 11 million customers and exceeding $5 billion in deposits on an FX-neutral basis. The company's consolidated net interest income (NII) grew by 34% year-over-year, reaching $1.8 billion, although consolidated net interest margins (NIM) slightly declined to 17.5%. NU's credit portfolio expanded to $24.1 billion, driven by a strong 64% year-over-year increase in total loan originations. Despite a 3% sequential decline in gross profit due to higher credit loss allowances, NU maintained a robust 27% annualized return on equity (ROE). The company emphasized its strategic focus on Brazil, Mexico, and Colombia, highlighting the opportunity to further grow revenue and improve operating leverage. Looking forward, NU aims to continue investing in its growth, with a particular emphasis on secured lending opportunities and expanding its digital banking footprint across Latin America.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.