Nu Holdings (NYSE:NU) has delivered a strong third quarter, reporting sharp increases in both net income and earnings per share. The company’s customer base now sits at 127 million, reflecting steady momentum.
See our latest analysis for Nu Holdings.
Nu Holdings’ momentum is hard to ignore. Following its third quarter surprise and continued expansion in Latin America, the share price has climbed nearly 50% year-to-date. Long-term investors have been rewarded as well, with a strong 3-year total shareholder return of over 250%, underlining the stock’s remarkable growth trajectory and increasing investor optimism.
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But with shares already up nearly 50% this year and analyst targets just modestly above current levels, the key question remains: Is Nu Holdings offering a true buying opportunity, or is the market already pricing in future growth?
Nu Holdings’ most closely watched narrative values the stock at $17.98 per share, comfortably above the last close at $15.89. This perspective suggests consensus expectations are factoring in more robust future growth than the current market price reflects.
The ongoing transition from cash to digital payments and online banking in historically underserved markets continues to accelerate Nu’s transaction volumes and increases opportunities for cross-sell and ecosystem stickiness. This supports robust net margin expansion as digital penetration deepens.
Read the complete narrative.
Want to see what ambitious growth forecasts are driving this estimate? The narrative points to rapid expansion, surging profit, and a bold margin outlook. Which numbers turn this outlook into valuation tailwind? Dive deeper to discover what separates this prediction from the crowd.
Result: Fair Value of $17.98 (UNDERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, fierce competition and rising credit risks could threaten Nu’s growth momentum. This underscores why continued vigilance remains essential for shareholders.
Find out about the key risks to this Nu Holdings narrative.
Looking through the lens of earnings multiples shows a different story. Nu Holdings trades at 30.4 times earnings, which is much higher than the US Banks industry average of 11.2x and its peer average of 11.6x. Even compared to the fair ratio of 20.1x, the premium is significant. This points to valuation risk if growth expectations do not hold up. Are investors paying too much for the Nu story?