Nu Holdings: Disruption in Financial Services
Amidst the turmoil of the 2022 bear market, growth stocks like Nu Holdings, a Brazilian fintech firm backed by Warren Buffett’s Berkshire Hathaway, stood resilient. With a market cap of $56.2 billion and a staggering 45% surge YTD, Nu Holdings has emerged as a beacon of hope in the equities market.
Nu Holdings: Growth Trajectory and Innovation
Founded in 2013, Nu Holdings boasts of a disruptive business model aimed at revolutionizing legacy financial services. As one of Latin America’s largest digital financial platforms, the company serves a whopping 94 million customers across Brazil, Mexico, and Colombia.
Leveraging proprietary products and innovative practices, Nu Holdings is at the forefront of creating groundbreaking financial solutions for individuals and businesses, such as the Nucripto platform.
Nu Holdings: Meteoric Growth Streak
The company has witnessed a meteoric rise, acquiring nearly five million new customers in the last quarter alone and a staggering 19 million customers over the past year. In Q4 of 2023, Nu Holdings reported a revenue surge of 57% YoY, with adjusted net income more than tripling to $395.8 million.
Boasting an expanding monthly average revenue per active customer at $10.6, Nu Holdings’ deposits also saw a 38% surge to $23.7 billion, underlining its robust financial performance.
Analyst Sentiment and Future Outlook
With 11 analysts covering NU stock, the consensus leans towards a “strong buy,” with an average target price of $10.83 – albeit lower than the current trading price. Wall Street remains optimistic with a high target price of $16, suggesting a 32% upside potential from the Friday close.
High growth projections anticipate Nu Holdings sales to reach $13.8 billion by 2025, with adjusted earnings forecasted to climb from $0.25 per share in 2023 to $0.66 per share in 2025.
Priced at 28.9x forward earnings, NU stock offers a compelling opportunity, given its projected annual earnings growth of over 60% in the coming years.
On the date of publication, Aditya Raghunath had no direct or indirect positions in the securities mentioned. All information presented here is for informational purposes only. For more details, refer to the Barchart Disclosure Policy.
The opinions expressed are solely those of the author and do not necessarily represent Nasdaq, Inc.’s views.
