Nu Holdings: Is Brazil’s Fintech Leader a Buy at This Discount?

Key Points

• Nu Holdings has over 50% of Brazil's adult population and is expanding in Mexico and Colombia, targeting Latin America's growing population and economy.
• Q4 2024 revenue grew 58% year-over-year to $2.99 billion, with net income nearly doubling to $552.64.
• According to the consensus analyst price target, Nu Holdings trades at a forward P/E of 13.67, with an RSI of 38 and a 46% potential upside.

As the first quarter of 2025 enters its final few weeks, an interesting shift has unfolded: the benchmark S&P 500 is trailing behind several foreign and emerging markets, including several leading Latin American companies. This unexpected twist has flung open the doors of opportunity for savvy investors hungry to tap into the potential of foreign companies, especially those trading at traditionally discounted valuations and poised for potential growth. 

Enter Nu Holdings Ltd. NYSE: NU, a leading fintech titan dominating the Latin American landscape. With its stock hovering near critical support levels, dipping into oversold territory, and boasting earnings metrics indicative of value, could Nu Holdings be a good choice for investors chasing alpha beyond the U.S. borders?

Nu Holdings: The Brazilian Fintech Giant

Nu Holdings is a Brazilian online bank and the largest fintech bank in Latin America. Founded in 2013, Nubank has launched various products, including NuConta (a digital account), an international credit card, personal loans, life insurance, and investment options.

What sets Nubank apart is its mobile app-controlled credit card, offering users a seamless, tech-driven banking experience.

Operating in the fast-growing fintech sector, Nubank competes with major players like Square, PayPal, and Stripe. However, its mobile-first approach and strong growth trajectory make it stand out.

As of Mar. 12, Nu Holdings had a market capitalization of just over $50 billion and an average daily trading volume of 35 million shares.

Nu Holdings Eyes Wider Latin American Market

Nu Holdings has captured over 50% of Brazil's adult population, nearing user saturation in its home market. Yet, this doesn't mean revenue growth will slow. There is still significant room to grow revenue from its existing Brazilian customer base. According to Nu's cohort analysis, older customers generate around $25 in monthly revenue, compared to $10 for the average user. As its newer customers mature, they are expected to use more Nu services, driving organic revenue growth.

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Nu Holdings isn’t limiting itself to Brazil. It has already gained traction in Mexico, with 10 million users and 2.5 million users in Colombia. Over the next decade, Nu Holdings plans to enter more Latin American markets. While these regions aren’t as profitable as Brazil, they offer strong long-term potential, with Latin America’s population exceeding 660 million. Expanding into these markets will position Nu Holdings to capture a larger share of the fintech landscape.

Nu Holdings Reports 58% Revenue Growth in Q4 2024

Nu Holdings reported its Q4 2024 earnings on February 20, 2025, showing strong growth despite missing some analyst forecasts.

Revenue reached $2.99 billion, a 58% year-over-year increase on a currency-neutral basis. However, due to the Brazilian Real's depreciation, revenue was slightly below the $3.2 billion estimate. 

Net income nearly doubled to $552.64 million, with earnings per share at $0.11, just shy of the $0.12 consensus.

Customer growth remained bright, with Nu adding 4.5 million users in the quarter, bringing its total to 114.2 million, a 22% annual increase.

Deposits surged 55% to $28.9 billion, while gross margins held firm at 45.6%, reflecting the company's operational strength despite macroeconomic challenges.

A High-Growth Fintech Worth Watching

After a sharp 34% pullback from its 52-week high, Nu Holdings' stock is now trading at a forward P/E of 13.67, suggesting a potential value opportunity. With an RSI of 38 indicating oversold conditions, the stock may be nearing a long-term discounted entry point for investors seeking exposure to international fintech.

While analysts currently rate Nu Holdings a Hold based on 10 reviews, the consensus price target of $15.47 implies a possible 46% upside from the latest close. Thus, Nu Holdings could be worth watching closely for those eyeing a high-growth fintech play in Latin America.