Is It Too Late to Buy Nu Holdings Stock?

Company Performance and Growth - Nu Holdings' stock price has surged by 250% since the beginning of 2023, despite starting well below its late-2021 IPO price [2] - In Q1, the company's revenue increased by 64% YoY to $2.7 billion, with net income rising 136% to $443 million, continuing a strong growth trend since 2019 [3] - The company surpassed 100 million customers in May, with nearly 60% of them using Nu as their primary bank [11] - Revenue is projected to grow from $8 billion in 2023 to $12 billion in 2024 and $15 billion in 2025, with earnings expected to triple during this period [12] Market Context and Opportunities - Latin America's broadband penetration in residential fixed segments surpassed 50% in 2022, while mobile internet users reached 418 million (65% of the population) by the end of 2023 [6] - GSMA predicts Latin America will have 485 million mobile internet users by 2030, with fixed broadband subscriptions growing by 8.4% in 2023 [14] - The region's e-commerce industry is expected to grow by 24% in 2024 and 21% in 2025, driven by increasing online spending [14] - Nu Holdings is well-positioned to benefit from the region's digital banking trends, alongside other fintech players like MercadoLibre and StoneCo [7][8] Competitive Landscape and Validation - Nu Holdings operates in a competitive space with traditional banks increasingly entering digital banking, but its focus on Latin America sets it apart [5] - Warren Buffett's Berkshire Hathaway holds a significant stake in Nu (107 million shares, ~3%), indicating confidence in the company's long-term potential [9] - The company's growth is supported by its ability to meet high expectations and its strong position in Brazil, Mexico, and Colombia [4][11] Valuation and Investment Outlook - Despite trading above its consensus price target of $12.77, Nu Holdings remains an attractive investment due to its projected earnings growth and rich valuation [15] - The company's focus on a narrow market segment has yielded strong results, with significant growth opportunities ahead as it expands its efforts [16]