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DAVE vs. NU: Which High-Growth Fintech Is Worth Buying Now?
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Key Takeaways
NU posted 14% sequential revenue growth in 3Q25 as its AI-native super app boosted margins and efficiency.
NU added 4.3M customers in Q3, lifting total users to 127M while keeping monthly costs per user under $1.
DAVE 3Q25 revenues surged 63% y/y, but it faces competition despite efficiency gains and credit quality.
Both Nu Holdings (NU - Free Report) and Dave (DAVE - Free Report) operate in the fintech and digital banking space, catering to the underbanked population. While DAVE targets the U.S. market, NU leads Latin America.
We have evaluated both companies to determine which of these two stocks investors should be inclined to add to their portfolios.
The Case for NU
The growing durability of the top line is the key differentiator for Nu Holdings. NU has successfully pivoted its expansive customer base into recurring, multi-product income streams that are significantly less exposed to macroeconomic headwinds. Furthermore, the company took proactive measures to transform into an AI-native super app, which resulted in 14% sequential growth in its revenues in the third quarter of 2025.
NU’s scalability is embedded in its ability to maintain its operational efficiency. During the aforementioned quarter, the company registered a 19% rally in net income, aiding margins to widen 200 basis points (bps). This growth was accompanied by a monthly average cost to serve per active customer below $1.
The company’s customer-centric strategy helped pay out dividends with the addition of 4.3 million customers in the quarter, taking the total count to 127 million, resulting in a monthly average revenue per active customer (ARPAC) of $13.4 and a monthly activity rate of 83%. NU has utilized AI in nuFormer that provides a critical understanding of customer behavior and can be integrated across risk and personalization engines. Early success is demonstrated by its ability to upgrade credit card limit policies in Brazil, raising customer limits without sacrificing risk appetite.
Nu Holdings appears to successfully replicate its Brazilian market expansion in Mexico. The company served 14% of Mexico’s population as of the third quarter of 2025, significantly higher than Brazil’s 10% when it entered its inflection point in 2019. NU managed to touch $12.5 in ARPAC in Mexico and keep the cost to serve under $1, allowing it to maintain favorable unit economics by reducing product prices.
The Case for DAVE
Dave’s new pricing model, coupled with average revenues per user expansion and ExtraCash originations growth, led to consistent growth in its top line over the past five quarters. In the third quarter of 2025, revenues rallied 15% from the preceding quarter and 63% year over year. With an increasing top line, operating expenses climbed as well.
However, the company registered a 2,800-bps year-over-year dip in total operating expenses as a percentage of revenues. This impressive feat paved the path to a 193% year-over-year surge in adjusted net income, suggesting operating efficiency, a necessity for scalable growth.
On the credit risk mitigation front, the company witnessed a 7-bps decline in its average 28-day delinquency rate to 2.33% in the third quarter of 2025. In September 2025, the company managed to keep this metric 2.19% utilizing its CashAI v5.5. Dave registered an 11-bps dip in 28-day days past due in September 2025, highlighting its credit engine’s efficacy.
We must acknowledge Dave’s new fee model, which consists of a flat 5% fee on all ExtraCash transactions with a minimum $5 fee and a $15 cap. This simplified fee model stands cheaper than legacy banks, making it easier for the underbanked and unserved demography to access credit, extending customer tenure.
Despite these positives, the company shoulders immense competitive pressure from fintech companies, including OppFi and Upstart Holdings, which offer similar services to Dave. As the neobank market expands, DAVE might face difficulty in capturing a larger share of the market pie. Therefore, to stay in the game, the company needs to invest proactively, stripping away its ability to balance growth and profitability.
How Do Estimates Compare for NU & DAVE?
The Zacks Consensus Estimate for Nu Holdings’ 2026 sales is pegged at $20.2 billion, hinting at 29.5% year-over-year growth. The consensus estimate for earnings is pegged at 85 cents, suggesting a 42.5% rise from the preceding year’s actual. One earnings estimate for 2026 has moved north in the past 60 days versus no southward revisions.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Dave’s 2026 sales is pegged at $656.4 million, indicating 20.2% year-over-year growth. The consensus estimate for earnings is $14 per share, suggesting an 8% year-over-year rise. There has been no change in analyst estimates or revisions lately.
Image Source: Zacks Investment Research
DAVE Trades Cheaper Than NU
Nu Holdings is currently trading at a forward 12-month P/E ratio of 19.53X, which is slightly below the 12-month median of 20.07X. Dave is trading at 12.99X, substantially lower than the 12-month median of 26.32X. Although both stocks are trading at a discount compared with their historical valuations, DAVE appears much cheaper than NU.
Image Source: Zacks Investment Research
Verdict
While both stocks display impressive momentum, investors are urged to add NU in their portfolio due to its scale and expertise that expand its arm across borders. With a massive customer base and an efficient AI-backed cost structure, Nu Holdings solidified itself as a major player within the fintech domain. It is fundamentally strong and is positioned to derive momentum from its diversified product pipeline and ability to capture Mexico’s market.
We recommend that investors retain Dave for now. While it showed promising growth in its profitability and credit engine, the market it operates in appears saturated. Competition from OppFi and Upstart might further intensify, demanding heavy investments, which could potentially harm the company’s ability to grow and remain profitable.
While investors might perceive DAVE as a value play, NU’s explosive growth trajectory, combined with its stronghold across borders, offers a more compelling risk-reward profile.
Image: Bigstock
DAVE vs. NU: Which High-Growth Fintech Is Worth Buying Now?
Key Takeaways
Both Nu Holdings (NU - Free Report) and Dave (DAVE - Free Report) operate in the fintech and digital banking space, catering to the underbanked population. While DAVE targets the U.S. market, NU leads Latin America.
We have evaluated both companies to determine which of these two stocks investors should be inclined to add to their portfolios.
The Case for NU
The growing durability of the top line is the key differentiator for Nu Holdings. NU has successfully pivoted its expansive customer base into recurring, multi-product income streams that are significantly less exposed to macroeconomic headwinds. Furthermore, the company took proactive measures to transform into an AI-native super app, which resulted in 14% sequential growth in its revenues in the third quarter of 2025.
NU’s scalability is embedded in its ability to maintain its operational efficiency. During the aforementioned quarter, the company registered a 19% rally in net income, aiding margins to widen 200 basis points (bps). This growth was accompanied by a monthly average cost to serve per active customer below $1.
The company’s customer-centric strategy helped pay out dividends with the addition of 4.3 million customers in the quarter, taking the total count to 127 million, resulting in a monthly average revenue per active customer (ARPAC) of $13.4 and a monthly activity rate of 83%. NU has utilized AI in nuFormer that provides a critical understanding of customer behavior and can be integrated across risk and personalization engines. Early success is demonstrated by its ability to upgrade credit card limit policies in Brazil, raising customer limits without sacrificing risk appetite.
Nu Holdings appears to successfully replicate its Brazilian market expansion in Mexico. The company served 14% of Mexico’s population as of the third quarter of 2025, significantly higher than Brazil’s 10% when it entered its inflection point in 2019. NU managed to touch $12.5 in ARPAC in Mexico and keep the cost to serve under $1, allowing it to maintain favorable unit economics by reducing product prices.
The Case for DAVE
Dave’s new pricing model, coupled with average revenues per user expansion and ExtraCash originations growth, led to consistent growth in its top line over the past five quarters. In the third quarter of 2025, revenues rallied 15% from the preceding quarter and 63% year over year. With an increasing top line, operating expenses climbed as well.
However, the company registered a 2,800-bps year-over-year dip in total operating expenses as a percentage of revenues. This impressive feat paved the path to a 193% year-over-year surge in adjusted net income, suggesting operating efficiency, a necessity for scalable growth.
On the credit risk mitigation front, the company witnessed a 7-bps decline in its average 28-day delinquency rate to 2.33% in the third quarter of 2025. In September 2025, the company managed to keep this metric 2.19% utilizing its CashAI v5.5. Dave registered an 11-bps dip in 28-day days past due in September 2025, highlighting its credit engine’s efficacy.
We must acknowledge Dave’s new fee model, which consists of a flat 5% fee on all ExtraCash transactions with a minimum $5 fee and a $15 cap. This simplified fee model stands cheaper than legacy banks, making it easier for the underbanked and unserved demography to access credit, extending customer tenure.
Despite these positives, the company shoulders immense competitive pressure from fintech companies, including OppFi and Upstart Holdings, which offer similar services to Dave. As the neobank market expands, DAVE might face difficulty in capturing a larger share of the market pie. Therefore, to stay in the game, the company needs to invest proactively, stripping away its ability to balance growth and profitability.
How Do Estimates Compare for NU & DAVE?
The Zacks Consensus Estimate for Nu Holdings’ 2026 sales is pegged at $20.2 billion, hinting at 29.5% year-over-year growth. The consensus estimate for earnings is pegged at 85 cents, suggesting a 42.5% rise from the preceding year’s actual. One earnings estimate for 2026 has moved north in the past 60 days versus no southward revisions.
The Zacks Consensus Estimate for Dave’s 2026 sales is pegged at $656.4 million, indicating 20.2% year-over-year growth. The consensus estimate for earnings is $14 per share, suggesting an 8% year-over-year rise. There has been no change in analyst estimates or revisions lately.
DAVE Trades Cheaper Than NU
Nu Holdings is currently trading at a forward 12-month P/E ratio of 19.53X, which is slightly below the 12-month median of 20.07X. Dave is trading at 12.99X, substantially lower than the 12-month median of 26.32X. Although both stocks are trading at a discount compared with their historical valuations, DAVE appears much cheaper than NU.
Verdict
While both stocks display impressive momentum, investors are urged to add NU in their portfolio due to its scale and expertise that expand its arm across borders. With a massive customer base and an efficient AI-backed cost structure, Nu Holdings solidified itself as a major player within the fintech domain. It is fundamentally strong and is positioned to derive momentum from its diversified product pipeline and ability to capture Mexico’s market.
We recommend that investors retain Dave for now. While it showed promising growth in its profitability and credit engine, the market it operates in appears saturated. Competition from OppFi and Upstart might further intensify, demanding heavy investments, which could potentially harm the company’s ability to grow and remain profitable.
While investors might perceive DAVE as a value play, NU’s explosive growth trajectory, combined with its stronghold across borders, offers a more compelling risk-reward profile.
NU carries a Zacks Rank #2 (Buy) and DAVE has a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.