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NU Stock Skyrockets 30% in a Month: Should You Buy, Hold, or Sell?
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Key Takeaways
NU stock jumped 30% in a month, outpacing an industry stuck in consolidation.
NU added 4.1M new customers in Q2 2025, reaching 122.7M, with revenues up 40% at FXN.
NU trades at 21.34x forward earnings, nearly double peers, raising valuation concerns.
Nu Holdings Ltd. (NU - Free Report) has experienced a notable 30% surge in its stock price over the past month, significantly outperforming the broader industry, which has remained in a consolidation phase. This analysis delves into the company's recent performance and evaluates whether current market conditions and price levels present a viable buying opportunity.
Image Source: Zacks Investment Research
NU is Scaling Fast, and Monetizing Even Faster
NU isn’t just expanding, it’s accelerating, and at a pace few fintechs can match. In the second quarter of 2025 alone, the digital banking leader onboarded more than 4.1 million new customers, lifting its total to 122.7 million, a 17% year-over-year surge. NU is proving it can scale massively without losing sight of revenue potential.
What makes this growth even more compelling is NU’s ability to monetize effectively amid rapid expansion. Average revenues per active customer came above $12 for the first time, increasing 18% year over year on a FX-neutral basis (FXN). It’s a clear sign that the company is maintaining strong unit economics, even as it moves into new markets and deepens penetration in existing ones.
In an industry where many fintechs pursue growth at the expense of profitability, NU stands apart. The company is showing that customer acquisition and financial discipline can go hand in hand. Its revenues rose 40% year over year at FXN in the second quarter, driven by high engagement and diversified monetization streams, including lending, interchange fees and marketplace services.
NU’s digital-first, scalable model is built for efficiency. Its flagship platform, NuBank, has not only disrupted the dominance of traditional banks, particularly in Brazil, but also earned a reputation as one of Latin America’s most trusted financial brands. With ongoing expansion in Mexico and Colombia, NU is positioning itself as a regional powerhouse. Its ability to offer low-cost, user-friendly financial services is unlocking access across underserved markets and fueling further growth.
While Nu continues to surge ahead in Latin America, U.S.-based peers like SoFi Technologies (SOFI - Free Report) and Block (XYZ - Free Report) are taking different routes to growth. SoFi is focusing on deepening customer relationships through bundled financial services like lending, investing and banking. Its strategy seems to emphasize lifetime value over rapid user expansion. Meanwhile, Block is sharpening its dual ecosystem approach, serving both individual users through Cash App and small businesses via Square.
While both SoFi and Block are evolving steadily, Nu’s pace and scale of customer acquisition in emerging markets underscore a distinct momentum that sets it apart in the global fintech landscape.
NU’s Strong Returns on Capital
Return on equity (ROE), a measure of profitability, reflects how effectively a company uses its shareholders' investments to generate earnings. NU’s trailing 12-month ROE is 29.9% compared with the industry’s average of 11.4%.
Image Source: Zacks Investment Research
NU has also shown strong returns on invested capital (ROIC), with a trailing 12-month ROIC of 14.5%, well above the industry average of 3.4%.
Image Source: Zacks Investment Research
NU Looks Pricey
NU stock appears significantly overvalued compared to industry peers, currently trading at 21.34 times forward earnings, almost double the sector's average of 10.15 times. This substantial premium reflects the market’s optimism about NU’s growth potential, driven by its innovative fintech model, expanding customer base, and strong revenue trajectory. However, such a lofty valuation also introduces risks, as any shortfall in earnings or slower-than-expected growth could lead to a sharp correction.
Inflation and Currency Risks Loom Over NU in Latin America
Brazil is currently grappling with an inflation rate of around 5%, notably higher than that of the United States. At the same time, its currency has steadily weakened against the U.S. dollar since the beginning of 2024. Although Brazil isn’t experiencing hyperinflation, the persistent above-average inflation remains a key concern. More broadly, inflationary volatility is a recurring theme in several Latin American markets where NU Holdings operates. Even relatively developed economies like Argentina have faced severe inflation, prompting Nubank to make a swift exit from that market due to economic instability. These macroeconomic headwinds, including potential foreign exchange losses, pose a real risk to Nubank’s profitability and could weigh on investor sentiment moving forward.
Strong Fundamentals, But Headwinds Call for Patience
Nu Holdings is showing strong growth, rapidly expanding its customer base and improving its ability to generate revenue per customer. The company stands out for combining fast scaling with solid financial discipline, making it a leader in Latin America’s fintech space. However, its stock trades at a significant premium compared to industry peers, reflecting high market expectations. At the same time, inflation and currency instability in the region pose risks to profitability and investor confidence. Given these positives and challenges, a hold stance is advisable. Investors should remain cautious and wait for a more attractive valuation before adding to their position.
Image: Bigstock
NU Stock Skyrockets 30% in a Month: Should You Buy, Hold, or Sell?
Key Takeaways
Nu Holdings Ltd. (NU - Free Report) has experienced a notable 30% surge in its stock price over the past month, significantly outperforming the broader industry, which has remained in a consolidation phase. This analysis delves into the company's recent performance and evaluates whether current market conditions and price levels present a viable buying opportunity.
NU is Scaling Fast, and Monetizing Even Faster
NU isn’t just expanding, it’s accelerating, and at a pace few fintechs can match. In the second quarter of 2025 alone, the digital banking leader onboarded more than 4.1 million new customers, lifting its total to 122.7 million, a 17% year-over-year surge. NU is proving it can scale massively without losing sight of revenue potential.
What makes this growth even more compelling is NU’s ability to monetize effectively amid rapid expansion. Average revenues per active customer came above $12 for the first time, increasing 18% year over year on a FX-neutral basis (FXN). It’s a clear sign that the company is maintaining strong unit economics, even as it moves into new markets and deepens penetration in existing ones.
In an industry where many fintechs pursue growth at the expense of profitability, NU stands apart. The company is showing that customer acquisition and financial discipline can go hand in hand. Its revenues rose 40% year over year at FXN in the second quarter, driven by high engagement and diversified monetization streams, including lending, interchange fees and marketplace services.
NU’s digital-first, scalable model is built for efficiency. Its flagship platform, NuBank, has not only disrupted the dominance of traditional banks, particularly in Brazil, but also earned a reputation as one of Latin America’s most trusted financial brands. With ongoing expansion in Mexico and Colombia, NU is positioning itself as a regional powerhouse. Its ability to offer low-cost, user-friendly financial services is unlocking access across underserved markets and fueling further growth.
While Nu continues to surge ahead in Latin America, U.S.-based peers like SoFi Technologies (SOFI - Free Report) and Block (XYZ - Free Report) are taking different routes to growth. SoFi is focusing on deepening customer relationships through bundled financial services like lending, investing and banking. Its strategy seems to emphasize lifetime value over rapid user expansion. Meanwhile, Block is sharpening its dual ecosystem approach, serving both individual users through Cash App and small businesses via Square.
While both SoFi and Block are evolving steadily, Nu’s pace and scale of customer acquisition in emerging markets underscore a distinct momentum that sets it apart in the global fintech landscape.
NU’s Strong Returns on Capital
Return on equity (ROE), a measure of profitability, reflects how effectively a company uses its shareholders' investments to generate earnings. NU’s trailing 12-month ROE is 29.9% compared with the industry’s average of 11.4%.
NU has also shown strong returns on invested capital (ROIC), with a trailing 12-month ROIC of 14.5%, well above the industry average of 3.4%.
Image Source: Zacks Investment Research
NU Looks Pricey
NU stock appears significantly overvalued compared to industry peers, currently trading at 21.34 times forward earnings, almost double the sector's average of 10.15 times. This substantial premium reflects the market’s optimism about NU’s growth potential, driven by its innovative fintech model, expanding customer base, and strong revenue trajectory. However, such a lofty valuation also introduces risks, as any shortfall in earnings or slower-than-expected growth could lead to a sharp correction.
Inflation and Currency Risks Loom Over NU in Latin America
Brazil is currently grappling with an inflation rate of around 5%, notably higher than that of the United States. At the same time, its currency has steadily weakened against the U.S. dollar since the beginning of 2024. Although Brazil isn’t experiencing hyperinflation, the persistent above-average inflation remains a key concern. More broadly, inflationary volatility is a recurring theme in several Latin American markets where NU Holdings operates. Even relatively developed economies like Argentina have faced severe inflation, prompting Nubank to make a swift exit from that market due to economic instability. These macroeconomic headwinds, including potential foreign exchange losses, pose a real risk to Nubank’s profitability and could weigh on investor sentiment moving forward.
Strong Fundamentals, But Headwinds Call for Patience
Nu Holdings is showing strong growth, rapidly expanding its customer base and improving its ability to generate revenue per customer. The company stands out for combining fast scaling with solid financial discipline, making it a leader in Latin America’s fintech space. However, its stock trades at a significant premium compared to industry peers, reflecting high market expectations. At the same time, inflation and currency instability in the region pose risks to profitability and investor confidence. Given these positives and challenges, a hold stance is advisable. Investors should remain cautious and wait for a more attractive valuation before adding to their position.
NU currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.