Nu Holdings (NU) Stock: Down 30% — Is This a Buying Opportunity?

TLDR

• Nu Holdings stock is down roughly 30% from recent highs and about 23% year to date, currently trading around $13.13.
• The company has reached 135 million customers across Latin America, with revenue per user climbing from $3 in 2020 to $16 last quarter.
• Net income hit $3.2 billion, up 41% year over year, well ahead of 27% gross profit growth.
• Mexico remains a high-growth market with only 15 million customers against a population of 133 million.
• Nu is targeting the U.S. as its fourth market, focusing on a small budget allocation to limit downside risk.

Nu Holdings (NU) stock is trading at $13.13, down roughly 30% from recent highs and about 23% year to date. Despite that drop, the underlying business tells a different story.

Nu Holdings Ltd., NU

The digital bank now serves 135 million customers across Brazil, Mexico, and Colombia. That’s a scale most financial platforms only dream about, and it’s translating into real earnings growth.

Net income came in at $3.2 billion over the trailing twelve months, up 41% year over year. That growth rate is outpacing gross profit growth of 27%, which points to operating leverage kicking in as the cost base stays relatively fixed while revenue scales up.

Revenue per active customer has risen sharply too. In 2020, that figure sat at $3. Last quarter it hit $16. That kind of monetization improvement matters a lot when you have 135 million users to work with.

Brazil vs. Mexico: Two Different Stories

Brazil is Nu’s most mature market. With nearly 100 million active customers in a country of 213 million people, the growth there is no longer about adding new users. Instead, Nu is layering on new products — lending, savings, insurance — to generate more from each existing customer.

Mexico is a different picture. Nu has 15 million customers there, against a total population of 133 million. The runway is long, and management has flagged strong progress on both customer acquisition and monetization in that market.

Colombia is still small in revenue terms, but it is active and growing.

The stock has been caught up in a broader rotation away from non-AI names. Investors chasing artificial intelligence themes have pulled liquidity from fintech and bank stocks, which helps explain the gap between Nu’s operating results and its share price performance.

U.S. Expansion: Low Risk, High Ceiling

Nu has confirmed it plans to enter the U.S. market as its fourth geography. Management hasn’t released specifics, but the approach is expected to target lower-income customers and the country’s Latino population — segments where Nu has built its playbook elsewhere.

The key detail here is budget. Nu plans to allocate only a small portion of its annual operating spend to the U.S. launch. If the effort doesn’t take off, the financial hit is limited. If it does, the upside could eventually match the scale of its Brazilian segment.

That’s the bet. Controlled downside, large potential upside.

At a market cap of around $64 billion and net income growing at roughly 41% annually, the stock trades at a discount relative to that growth rate. If income compounds toward $10 billion over the next several years, current prices could look low in hindsight.

Analysts currently flag four key positive factors around Nu’s growth, value, and profit trends, compared to just two notable risks.

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