Investors might want to bet on Nu Holdings Ltd. (NU) , as it has been recently upgraded to a Zacks Rank #2 (Buy). This upgrade primarily reflects an upward trend in earnings estimates, which is one of the most powerful forces impacting stock prices. The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate. Individual investors ...

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years. MFG currently has a forward P/E ratio of 10.80, while NU has a forward P/E of 23.07. We also note that MFG has a PEG ratio of 0.68. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio ...

Core Insights - Both Nu Holdings (NU) and Sezzle (SEZL) are positioned in the rapidly growing fintech sector, with NU serving over 118 million customers across Mexico, Brazil, and Colombia, while SEZL focuses on providing payment solutions for the underbanked population [1][7]. Group 1: Nu Holdings (NU) - NU's cloud-centric, mobile-first infrastructure allows it to serve customers at a lower cost compared to traditional banks, contributing to a 19% year-over-year growth in customers during Q1 2025 [3]. - The company reported a 40% year-over-year growth in revenues and a 74% increase in net income for Q1 2025, with EBITDA margin rising by 440 basis points and net margin increasing by 400 basis points [4]. - NU has successfully expanded its customer base in Mexico and Colombia, with over 6 million and 1.5 million customers respectively, leveraging its scalable model to gain a first-mover advantage in these markets [5]. - Despite its strengths, NU faces competitive pressure from established players like SoFi, which could impact its market share [6]. Group 2: Sezzle (SEZL) - SEZL targets the underbanked population, with the digital payment market expected to grow at an 11.8% CAGR from 2023 to 2028, providing significant growth opportunities [7]. - The company has seen a 123.3% year-over-year increase in revenues and a 260.6% rise in operating income during Q1 2025, driven by an increase in customer purchase frequency from 4.5X to 6.5X [8]. - SEZL's product innovation, such as the On-Demand feature, enhances customer experience and flexibility, solidifying its position in the fintech space [9]. - However, the BNPL sector faces regulatory scrutiny, which could increase compliance costs and impact SEZL's customer acquisition and margins [11]. Group 3: Financial Estimates and Valuation - The Zacks Consensus Estimate for NU's 2025 sales is $14.9 billion, indicating a 29.4% year-over-year growth, with earnings estimated at 54 cents per share, reflecting a 20% increase [12]. - For SEZL, the 2025 sales estimate is $441.8 million, implying a 62.9% year-over-year growth, with earnings projected at $3.26, a 77.2% rise from the previous year [13]. - NU is trading at a forward P/E ratio of 20.7X, slightly above its 12-month median, while SEZL trades at 36.97X, indicating that NU is a cheaper stock compared to SEZL [15]. Group 4: Investment Outlook - NU is considered a better investment option due to its strong financials, effective credit risk management, and lower valuation compared to SEZL, despite both companies being fundamentally strong [17][18].

Group 1 - Nu Holdings Ltd. (NU) closed at $13.99, with a daily gain of +1.01%, outperforming the S&P 500's gain of 0.54% [1] - Over the past month, NU shares increased by 13.15%, significantly surpassing the Finance sector's gain of 2.92% and the S&P 500's gain of 4.2% [1] Group 2 - The upcoming earnings report for Nu Holdings is scheduled for August 14, 2025, with an expected EPS of $0.12, indicating no change from the same quarter last year [2] - Revenue is forecasted at $3.66 billion, reflecting a 28.32% increase compared to the same quarter last year [2] Group 3 - Full-year Zacks Consensus Estimates predict earnings of $0.54 per share and revenue of $14.9 billion, representing year-over-year increases of +20% and +29.38%, respectively [3] - Recent analyst estimate revisions suggest a favorable outlook on the business health and profitability of Nu Holdings [3] Group 4 - The Zacks Rank system, which incorporates estimate changes, indicates that NU currently holds a Zacks Rank of 3 (Hold) [5] - The Zacks Consensus EPS estimate has shifted 1.24% upward over the past month [5] Group 5 - Nu Holdings has a Forward P/E ratio of 25.49, which is a premium compared to its industry's Forward P/E of 9.77 [5] - The company has a PEG ratio of 0.79, while the industry average PEG ratio is 0.98 [6] Group 6 - The Banks - Foreign industry, part of the Finance sector, has a Zacks Industry Rank of 17, placing it in the top 7% of over 250 industries [6] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Core Insights - Nu Holdings Ltd. (NU) has experienced a significant 13% increase in stock price over the past month, outperforming the fintech industry's 2% growth, indicating renewed investor confidence in the company's future [1][6]. Company Performance - In Q1 2025, NU added 4.3 million new customers, bringing the total user base to 118.6 million, which represents a year-over-year increase of 19%. Nearly 100 million of these users are monthly active customers, showcasing high engagement and retention [3][6]. - NU's average revenue per active customer (ARPAC) in Q1 was $11.2, slightly down from $11.4 a year earlier, demonstrating the company's ability to maintain monetization despite rapid user growth [5][6]. - Total revenues rose 19% year-over-year, driven by diverse monetization strategies including lending products, interchange fees, and marketplace services, which enhances revenue stability [7][6]. Operating Model - NU operates on a digital-first, low-cost, and scalable model, with its flagship brand NuBank being a trusted financial services platform in Brazil. This infrastructure allows NU to serve customers at a lower cost compared to traditional banks [8][9]. - The company benefits from low customer acquisition costs and high engagement, resulting in better margins compared to competitors [9]. Market Expansion - NU is expanding beyond Brazil, with over 6 million customers in Mexico and 1.5 million in Colombia, capitalizing on low traditional banking penetration and high demand for flexible financial solutions in these markets [10][11]. Financial Outlook - The Zacks Consensus Estimate projects NU's earnings for 2025 at 54 cents, reflecting a 20% growth from the previous year, with sales expected to increase by 29% in 2025 and 28% in 2026 [12][13]. Competitive Landscape - NU's growth strategy contrasts with U.S. fintechs like SoFi and Block, which focus on different business models. NU's emphasis on hypergrowth in underbanked regions, combined with financial discipline, positions it favorably in the competitive landscape [15][17].

Core Viewpoint - Bank stocks are generally characterized as high-value, low-growth investments, typically offering dividends and reliable long-term growth, but there are exceptions with high-growth candidates like SoFi Technologies and Nu Holdings that cater to risk-tolerant investors [1][2]. Group 1: SoFi Technologies - SoFi is positioned as a potential top-10 bank, having emerged successfully from the SPAC trend and is recognized as an industry disruptor with significant growth potential [3][4]. - The bank operates entirely online, providing user-friendly services aimed at novice users, which gives it an advantage over traditional banks due to its agility and flexibility [4]. - In Q1 2025, SoFi attracted 800,000 new accounts, marking a 34% increase year-over-year, targeting young professionals and employing aggressive marketing strategies [5]. - SoFi's growth strategy focuses on cross-selling and upselling services to enhance user monetization, while also launching innovative services like access to IPOs and blockchain-based remittances [6]. - The core segment of SoFi is lending, and with decreasing interest rates, it has reported strong revenue and profit growth, with expectations for its financial services segment to become the largest contributor to net income [7]. Group 2: Nu Holdings - Nu operates in Brazil, Mexico, and Colombia, experiencing rapid growth with millions of new customers added quarterly, although it still has significant room for expansion [8][9]. - In Q1 2025, Nu added over 4.3 million new accounts, totaling 118.6 million, with a strong presence in Brazil where over half of the adult population holds an account [9]. - The company reported a 40% year-over-year revenue increase and a 74% rise in net income to $557.2 million, despite a deceleration in sales growth amid high inflation in Brazil [10]. - Deposits grew by 48% year-over-year, and loan originations increased by 64%, although net interest margin decreased from 19.5% to 17.5% due to investments in Mexico and Colombia [11]. - Despite the challenges in Mexico and Colombia, Nu's Brazilian operations remain profitable, providing a foundation for continued growth in these emerging markets [12].

Company Overview - Nu Holdings (NU) shares increased by 3.6%, closing at $13.54, with trading between $13.12 and $13.54 during the day [1] - The stock's rise is attributed to growing analyst confidence, with several Wall Street firms raising their price targets modestly over the past week [1] - Despite the gains, Nu's stock is still 16% below its 52-week high of approximately $16.14 [4] Market Performance - Nu's stock outperformed the Nasdaq Composite, which was up 0.18%, and the S&P 500, which dropped by 0.4% [2] - Trading volume for Nu was around 123 million shares, double the 50-day average of 84.5 million [2] Competitive Landscape - Industry peers also experienced gains, with Inter & Co (INTR) rising by 4% to $7.05, reflecting strength after recent earnings and supportive central bank signals for digital lenders [3] - In contrast, StoneCo (STNE) declined by 2% to $14.87 despite the broader tech momentum this year [3] Analyst Sentiment - The positive reassessments of Nu's stock are driven by accelerating user metrics and promising early results from its credit card and loan offerings in new Latin American markets [4] - If Nu continues to execute well, further price target revisions may occur [4]

Company Performance - Nu Holdings Ltd. ended the recent trading session at $12.83, showing a -1.53% change from the previous day's closing price, underperforming the S&P 500 which lost 0.33% [1] - The company's shares have increased by 8.58% over the last month, outperforming the Finance sector's gain of 3.2% and the S&P 500's gain of 4.07% [1] Upcoming Earnings - Nu Holdings Ltd. is set to disclose its earnings on August 14, 2025, with projected earnings of $0.12 per share, indicating no growth from the prior-year quarter [2] - The consensus estimate for revenue is $3.66 billion, reflecting a 28.32% increase compared to the year-ago quarter [2] Fiscal Year Projections - For the entire fiscal year, earnings are projected at $0.54 per share and revenue at $14.9 billion, representing changes of +20% and +29.38% respectively from the prior year [3] - Recent changes to analyst estimates indicate optimism regarding the business and profitability [3] Valuation Metrics - Nu Holdings Ltd. has a Forward P/E ratio of 23.98, which is a premium compared to the industry average Forward P/E of 10.06 [6] - The company holds a PEG ratio of 0.74, while the average PEG ratio for the Banks - Foreign industry is 0.99 [6] Industry Context - The Banks - Foreign industry is part of the Finance sector and currently holds a Zacks Industry Rank of 26, placing it in the top 11% of over 250 industries [7] - The Zacks Industry Rank evaluates the strength of industry groups based on the average Zacks Rank of individual stocks, with the top 50% rated industries outperforming the bottom half by a factor of 2 to 1 [7]

Core Points - Nu Holdings' shares fell 4.5% to close at $13.03 on July 10, with a trading volume of approximately 107.8 million shares, which is about 79% above its 50-day average volume of 60.1 million shares [1] - The decline occurred despite broader market gains, with the S&P 500 up 0.27% and the Dow Jones Industrial Average up 0.43%, while competitor SoFi Technologies rose 3.7% [2] - Nu Holdings remains above its 50-day ($12.64) and 200-day ($12.49) moving averages, with a year-to-date gain of approximately 25.8%, indicating a longer-term upward trend [3] - The decline may be attributed to multiple factors, including potential growth slowdown, inflation concerns, and rising interest rates in Latin America, with increased trading volume suggesting institutional repositioning or profit-taking [3]

Company Overview - Nu Holdings (NYSE: NU) is a digital fintech bank primarily operating in Latin America, with additional presence in Germany and the U.S. [1] Financial Products - The company offers a wide range of financial products similar to traditional banking services [1]