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Nu Holdings (NU)
NYSE:NU

Nu Holdings (NU) AI Stock Analysis

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NU

Nu Holdings

(NYSE:NU)

Rating:75Outperform
Price Target:
$14.00
▲(3.78%Upside)
Nu Holdings' strong financial performance and positive earnings call highlights are significant strengths, driving the stock's potential. Technical indicators support a bullish outlook, though the valuation appears stretched, and caution is advised due to increased credit loss allowances and funding pressures.
Positive Factors
AI-Driven Credit Growth
Nubank's newer predictive AI models have unlocked stronger statistical performance than expected, accelerating both credit limit increases and loan growth.
Competitive Advantage in Loan Rates
Nubank's digital, direct-to-consumer model enables it to bypass traditional brokers, offering rates 15-30% below peers, which is a significant pricing advantage.
Growth in Payroll Loans
Nubank's public payroll loan business is now showing strong momentum, with volumes beating internal budgets, indicating a solid ramp-up.
Negative Factors
Lag in Investments Business
The investments business has lagged expectations, and Nubank's platform is still not meeting the needs of its high-income user base.
Skepticism in Product Scaling
Since launching its payroll loan product, Nubank's expansion has been gradual, fueling skepticism that the product may not scale meaningfully.

Nu Holdings (NU) vs. SPDR S&P 500 ETF (SPY)

Nu Holdings Business Overview & Revenue Model

Company DescriptionNu Holdings Ltd. operates as a digital financial services platform and technology company primarily in Brazil, Mexico, and Colombia. It offers Nu credit and debit cards; Ultraviolet credit and debit cards; and mobile payment solutions for NuAccount customers to make and receive transfers, pay bills, and make everyday purchases through their mobile phones. The company provides savings solutions, such as Nu Personal Accounts, a digital account solution that supports all personal finance activities, from daily purchases and money transfers to savings; and Nu business accounts designed specifically for entrepreneur customers and their businesses. In addition, it offers NuInvest, an investment product that provides equity, fixed-income, options, and ETF products, as well as multimarket funds with curated asset allocations based on the customer's risk profile and financial position; personal unsecured loans; in-app buy now pay later' solution for Nu card customers to pay credit and debit purchases, and banking payment slips over time in up to twelve installments; and NuInsurance protecting solutions to help its customers secure life insurance and funeral benefits. The company was founded in 2013 and is headquartered in Sao Paulo, Brazil.
How the Company Makes MoneyNu Holdings makes money primarily through the interest earned on loans and credit card balances, as well as through fees associated with its financial products. The company earns interchange fees from transactions made using its credit cards. In addition, Nu Holdings offers personal loans, from which it derives interest income. The company leverages its large customer base and data-driven approach to cross-sell products and services, enhancing its revenue streams. Partnerships with various financial institutions and technology providers also play a role in expanding its offerings and boosting income.

Nu Holdings Key Performance Indicators (KPIs)

Any
Any
Total Customers
Total Customers
Counts the total number of customers, showing the company’s market reach and potential for cross-selling opportunities.
Chart InsightsNu Holdings continues its robust customer growth trajectory, adding 4.3 million customers in Q1 2025, reaching 119 million. This growth is fueled by strong expansion in Brazil, Mexico, and Colombia, with Mexico seeing a 70% increase over the past year. Despite challenges like increased credit loss allowances and funding cost pressures, the company maintains a high engagement rate and strategic focus on expanding its digital banking footprint. The recent banking license in Mexico is poised to further accelerate growth and enhance product offerings.
Data provided by:Main Street Data

Nu Holdings Earnings Call Summary

Earnings Call Date:May 13, 2025
(Q1-2025)
|
% Change Since: 2.66%|
Next Earnings Date:Aug 14, 2025
Earnings Call Sentiment Positive
The earnings call reflects strong customer growth and expansion, particularly in Mexico, along with significant improvements in operating efficiency and net income. However, there are challenges related to credit loss allowance increases and funding cost pressures in emerging markets.
Q1-2025 Updates
Positive Updates
Strong Customer Growth
NU Holdings added 4.3 million customers in Q1 2025, reaching a total of 119 million across all markets, with significant increases in Brazil, Mexico, and Colombia.
Expansion in Mexico
Customer base in Mexico grew by 70% over the past four quarters, with deposits exceeding $5 billion and revenues reaching $245 million.
Record Loan Origination
Total loan originations hit a record $20.2 billion, increasing by 64% year-over-year, driven by strong unsecured loan performance.
Operating Efficiency Improvement
Efficiency ratio improved to 24.7%, a 740 basis point improvement year-over-year, showcasing operational efficiencies.
Net Income Growth
Net income increased by 74% year-over-year, reaching $557 million, with an annualized ROI of 27%.
New Banking License in Mexico
NU Holdings received a banking license in Mexico, which will accelerate growth and product offerings.
Negative Updates
Credit Loss Allowance Increase
Higher credit loss allowance in Q1 impacted gross profit margins, leading to a 3% sequential decline in gross profit.
Seasonal NPL Increase
NPLs in the 15 to 90-day category increased by 60 basis points to 4.7%, reflecting typical Q1 seasonality.
Funding Cost Pressure in Mexico and Colombia
Investments in building local deposit franchises in Mexico and Colombia led to short-term pressure on net interest margins.
Company Guidance
During the first quarter of 2025, NU Holdings reported significant growth and expansion, adding 4.3 million customers to reach a total of 119 million across Brazil, Mexico, and Colombia. In Brazil, they now serve approximately 59% of the adult population, with 85% of these customers being active users. NU Holdings also achieved a monthly active customer activity ratio above 83%, reflecting deep engagement. In Mexico, customer growth surged by 70% over the past four quarters, reaching 11 million customers and exceeding $5 billion in deposits on an FX-neutral basis. The company's consolidated net interest income (NII) grew by 34% year-over-year, reaching $1.8 billion, although consolidated net interest margins (NIM) slightly declined to 17.5%. NU's credit portfolio expanded to $24.1 billion, driven by a strong 64% year-over-year increase in total loan originations. Despite a 3% sequential decline in gross profit due to higher credit loss allowances, NU maintained a robust 27% annualized return on equity (ROE). The company emphasized its strategic focus on Brazil, Mexico, and Colombia, highlighting the opportunity to further grow revenue and improve operating leverage. Looking forward, NU aims to continue investing in its growth, with a particular emphasis on secured lending opportunities and expanding its digital banking footprint across Latin America.

Nu Holdings Financial Statement Overview

Summary
Nu Holdings has shown strong financial performance with impressive growth in revenue and profitability. The company effectively manages operational costs, resulting in improved margins and net income. The balance sheet is stable with low leverage and a strong cash position, providing a solid foundation for future growth. Robust cash flow generation supports operational and strategic initiatives, although there is room for improvement in asset utilization and strengthening the equity ratio.
Income Statement
88
Very Positive
Nu Holdings has demonstrated strong revenue growth with a significant increase in total revenue over the years from $737M in 2020 to $11.61B TTM. The gross profit margin has been consistently healthy, indicating effective cost management. Furthermore, the company turned its net income from a loss in 2022 to a significant profit of $2.15B TTM. The EBIT and EBITDA margins have also improved, reflecting solid operational efficiency.
Balance Sheet
75
Positive
The balance sheet shows a solid equity position with an equity ratio of 15.9% TTM. The debt-to-equity ratio is relatively low at 0.10, indicating conservative leverage. A strong cash position with $27.07B in cash and equivalents further supports financial stability. However, the equity ratio suggests room for improvement in asset utilization.
Cash Flow
82
Very Positive
Operating cash flows have been robust, growing to $4.06B TTM from $755M in 2022, indicating strong cash generation from operations. Free cash flow improved significantly, showing positive growth and the company has maintained a healthy operating cash flow to net income ratio. This reflects efficient conversion of income to cash, supporting liquidity and potential for reinvestment.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue11.61B11.10B7.67B4.52B1.51B574.99M
Gross Profit5.23B5.10B3.35B1.57B664.56M190.43M
EBITDA3.09B2.87B1.60B35.27B-152.82M-185.75M
Net Income2.15B1.97B1.03B-364.58M-164.99M-171.49M
Balance Sheet
Total Assets54.19B49.93B43.35B29.93B19.86B10.15B
Cash, Cash Equivalents and Short-Term Investments27.07B16.74B22.18B16.90B2.71B2.34B
Total Debt864.98M886.53M1.17B803.16M167.92M189.21M
Total Liabilities45.58B42.28B36.94B25.04B15.42B9.72B
Stockholders Equity8.61B7.65B6.41B4.89B4.44B438.11M
Cash Flow
Free Cash Flow3.82B2.22B1.09B641.27B-2.95B966.53M
Operating Cash Flow4.06B2.40B1.27B755.57B-2.92B974.52M
Investing Cash Flow-385.23M-330.63M-177.00M-127.15B-154.19M-16.27M
Financing Cash Flow300.32M727.74M425.21M654.04B3.34B240.10M

Nu Holdings Technical Analysis

Technical Analysis Sentiment
Positive
Last Price13.49
Price Trends
50DMA
12.46
Positive
100DMA
11.90
Positive
200DMA
12.52
Positive
Market Momentum
MACD
0.37
Negative
RSI
61.62
Neutral
STOCH
83.28
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NU, the sentiment is Positive. The current price of 13.49 is above the 20-day moving average (MA) of 12.61, above the 50-day MA of 12.46, and above the 200-day MA of 12.52, indicating a bullish trend. The MACD of 0.37 indicates Negative momentum. The RSI at 61.62 is Neutral, neither overbought nor oversold. The STOCH value of 83.28 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NU.

Nu Holdings Risk Analysis

Nu Holdings disclosed 1 risk factors in its most recent earnings report. Nu Holdings reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Nu Holdings Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
82
Outperform
$88.12B7.9719.22%5.95%19.48%26.26%
SASAN
78
Outperform
$124.39B9.1113.25%2.93%0.26%19.35%
BCBCS
77
Outperform
$62.93B9.069.36%3.06%11.33%47.74%
NWNWG
77
Outperform
$52.30B8.7013.70%4.12%18.85%14.85%
INING
76
Outperform
$69.21B10.5411.92%12.19%-0.63%-6.01%
NUNU
75
Outperform
$65.00B30.1327.91%33.20%68.09%
64
Neutral
$6.55B10.896.59%5.08%24.65%0.99%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
NU
Nu Holdings
13.49
0.67
5.23%
BBVA
Banco Bilbao
15.40
5.54
56.19%
BCS
Barclays
17.88
6.84
61.96%
ING
ING Groep
22.36
5.56
33.10%
NWG
NatWest Group
13.01
4.91
60.62%
SAN
Banco Santander SA
8.46
3.81
81.94%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jun 25, 2025