Nu .-Is Nu Holdings Stock a Buy Now?

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]