Where Will Nu Holdings Stock Be in 10 Years?

Core Insights - Nu Holdings, the parent company of Nu Bank, is a leading neobank in Latin America, particularly in Brazil, with nearly 100 million active customers [1][3] - The company aims to simplify banking services in a region plagued by poor banking experiences, high fees, and unclear regulations [2][4] - Nu Holdings has expanded its customer base to Mexico and Colombia, with 8.9 million and 2 million customers respectively, and has potential for further expansion in other Latin American countries [4] Growth Potential - Economic growth in Latin America is expected to benefit Nu Holdings, as increased spending, saving, and borrowing correlate with the bank's revenue [5] - Mexico's GDP has shown significant growth, Brazil's economy is recovering, and Argentina is stabilizing under new leadership, creating a favorable environment for Nu Holdings [5][6] - The region's demographic trends indicate a growing young adult population, which is likely to enhance consumer spending in the coming decade [5] Customer and Revenue Projections - Nu Holdings could potentially reach 200 million active customers in the next 10 years, given the region's population growth projections [7] - Monthly spending per active customer is expected to double over the next decade, contributing to a significant increase in revenue [8] - If both customer numbers and spending per customer double, revenue could grow fourfold, with underlying earnings power potentially increasing fivefold [9] Financial Estimates - Current net income for Nu Holdings stands at $1.78 billion, which could rise to $8.9 billion in 10 years if growth projections hold true [10] - Applying a price-to-earnings ratio of 20 to the projected net income suggests a market capitalization of $178 billion, indicating a potential tripling of the current market cap [10][11] - The stock is viewed as a long-term buy opportunity, with the potential for significant appreciation if earnings continue to grow rapidly [11]