The all-digital bank reports earnings this week, and investors will be watching.There's been a lot of excitement in the stock market so far in 2025, mostly related to artificial intelligence (AI). The DeepSeek launch took investors by surprise a few weeks ago, and since then there's been a torrent of high-profile earnings reports like those of Apple, Amazon, and Alphabet.Despite all that, the S&P 500 index is up only 3% this year. It's just off its all-time high, and valuations are looking expensive right n ...

The Latin American digital bank still looks like a promising investment.Nu Holdings (NU -0.36%), the leading digital bank in Latin America, has been a divisive stock since its public debut three years ago. It went public at $9, dropped below $4 in 2022, but since then it has more than tripled to about $14 per share.The bulls loved Nu because it was growing like a weed, it had plenty of room to expand, and it was backed by Warren Buffett's Berkshire Hathaway. The bears warned that Nu faced tough macro challe ...

Core Insights - Nu's stock experienced a significant increase of 28% in January, driven by new ventures and positive updates, which reassured investors after a challenging December [1] - The company reported a remarkable 56% year-over-year revenue growth in the third quarter of 2024, indicating strong ongoing growth potential [2] - Nu operates a fully digital bank in Brazil, providing a superior customer experience through its financial services app, which includes bank accounts, lending products, and investment tools [3] Market Presence - Nu has nearly 100 million members in Brazil, representing over half of the adult population, and is also appealing to higher-income consumers with targeted products [4] - In Mexico, Nu has reached 10 million customers, doubling its membership in one year, largely due to a newly launched high-interest savings account, capturing 12% of the adult population [5] - The company is also expanding its services in Colombia and has introduced innovative products like NuCel cellular data plans and a cash withdrawal program in Mexico [6] Investor Sentiment - Despite initial market concerns regarding Nu's investment in an international digital bank and economic volatility in Latin America, recent developments have reassured investors about the company's growth trajectory [7] - Nu's stock trades at 36 times trailing-12-month earnings, which may seem high for a bank but is considered a bargain for a high-growth stock, encouraging investor confidence [8]

Warren Buffett made some big moves last year. The portfolio of his holding company, Berkshire Hathaway, saw some massive shifts in position sizes, including some huge selling of its biggest position. Moving into the new year, two Berkshire positions in particular look compelling right now.This fintech stock is too cheap to pass upFintech stocks are growth machines, at least in theory. A company that offers financial services directly through a smartphone can, theoretically, scale much faster and more econom ...

Nu Holdings Ltd. (NU) has delivered impressive performance over the past month. Its stock has surged 30%, significantly outperforming the industry‘s growth of 6%.NU’s peers have shown similar performances. Banco Santander (Brasil) S.A. (BSBR) has gained 15%, while SoFi Technologies (SOFI) has rallied 7% during the same period.Image Source: Zacks Investment ResearchConsidering the current strength of NU shares, investors may wonder if now is the right time to invest in the stock. Let’s delve deeper.NU: Disru ...

Warren Buffett is a money man -- in multiple ways. The legendary investor ranks among the wealthiest people in the world with a net worth of around $144 billion. While his Berkshire Hathaway operates in a wide range of sectors, it's categorized in the financial services sector because of its huge insurance businesses. You might be surprised at just how important other financial stocks are to Buffett. A little over 39% of his $296 billion Berkshire Hathaway portfolio is invested in 11 financial stocks. Buffe ...

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Growth - Nu Holdings generated $2.9 billion in revenue in Q3, a 38% year-over-year increase, and more than 500% higher than the same period in 2021 [2] - The company operates as a digital-only bank, offering products like checking and savings accounts, credit cards, insurance, and brokerage services, which allows it to focus on technological innovation and user experience [3] - Nu added 5.2 million net new customers in Q3, bringing its total customer base to 109.7 million, with the majority in Brazil and recent expansion into Mexico and Colombia [4] - Latin America presents significant growth potential, with 70% of the population unbanked or underbanked, positioning Nu to attract more customers and drive revenue growth [5] Profitability - Nu transitioned from a net loss of $9.1 million in 2022 to reporting positive GAAP net income in 2023, with Q3 net income increasing 83% year-over-year to $553 million, representing an 18.8% margin [6][7] - The company achieved strong unit economics, generating $11 in average revenue per active customer in Q3, a 25% year-over-year increase on a currency-neutral basis, while reducing the cost to serve the average customer to $0.80, down 4% from Q3 2023 [8] - Operating expenses as a percentage of revenue declined to 21% from 24% in Q3 2023, demonstrating operating leverage [8] Valuation - Nu's shares are trading at a forward price-to-earnings ratio of 20.3, significantly below its historical average and at a 10% discount to the S&P 500 [9] - Wall Street forecasts Nu's revenue and earnings per share to grow at compound annual rates of 30% and 38%, respectively, between 2024 and 2026, indicating strong future returns for investors [10]

Recommendation Upgrade - The analyst upgrades the recommendation on Nu Holdings (NYSE: NU) from hold to buy due to recent developments that have provided a new perspective on the investment thesis [1] Analyst Background - The analyst has more than 5 years of experience in equity analysis in Latin America, providing clients with in-depth research and insights to aid in informed investment decisions [1] Disclosure - The analyst has no stock, option, or similar derivative position in any of the companies mentioned and no plans to initiate any such positions within the next 72 hours [2] - The article expresses the analyst's own opinions and is not receiving compensation for it other than from Seeking Alpha [2] - The analyst has no business relationship with any company whose stock is mentioned in the article [2]

Company Overview - Nu Holdings (NYSE: NU) is a rapidly growing neobank operating exclusively online in Latin America [1] - The company has significant growth potential and is becoming increasingly profitable each year [1] - Despite its strong fundamentals, Nu Holdings' stock price has remained relatively stagnant since March 2024 [1] Growth Potential - Nu Holdings has a substantial runway for growth in the Latin American market [1] - The company's profitability is improving annually, indicating strong operational performance [1] Investment Perspective - Quantitative analysis suggests Nu Holdings may be undervalued based on its growth prospects [1] - The company's financial metrics are considered more important than narrative factors in assessing its investment potential [1] Analyst Background - The analysis is conducted by an experienced investor with a decade-long track record since 2013 [1] - The analyst employs quantitative methods that have been thoroughly backtested for success [1] - The investment approach is informed by extensive reading of financial literature, including works on high-growth stocks and quantitative analysis [1]