Nu Holdings, an online-only bank serving nearly 140 million customers across Brazil, Colombia and Mexico, has delivered double-digit revenue growth—sometimes exceeding 100 percent year-over-year—since its 2013 founding.
The company's latest quarterly results addressed skeptics who questioned whether its growth days were behind it. Nu expanded its customer base while maintaining credit quality and net interest margins—a feat competitors have struggled to match. Its consolidated cost of deposits fell to 88 percent of the interbank rate, down three percentage points from a year ago. Operating efficiency and asset quality metrics both improved.
The durability lies in execution: rivals expanded deposit bases only by raising deposit costs and accepting weaker credit standards. Nu did neither.
Wall Street consensus is Moderate Buy, with six Buy and two Hold ratings. Simply Wall St's analysis values the stock at $22.74 versus the current price of $14.21, implying 60 percent upside from their model—though the firm's methodology has a wide range of assumptions.
Nu trades at 19 times trailing earnings, a premium to the U.S. Banks industry average of 11.8 times but in line with a fair multiple of 18.7 times for a bank with this growth profile and margin stability. Analysts note the valuation leaves little room for disappointment.
The Motley Fool rates Nu as its top fintech stock, citing durable economics, revenue expansion and profit growth. Mexico operations are in early innings and represent a meaningful customer acquisition vector.
The key catalysts: quarterly deposit cost trends, credit loss ratios, and whether margin expansion continues. Any uptick in deposit costs or credit losses would test the bull thesis.
