NU vs. DAVE: Which Fintech Stock Should Investors Back Right Now?

Core Insights - Nu Holdings (NU) and Dave (DAVE) are significant players in the digital financial services sector, with NU serving over 118 million customers in Latin America and DAVE focusing on the U.S. market [2][9]. Group 1: Nu Holdings (NU) - NU experienced a 19% year-over-year growth in new customers in Q1 2025, reaching nearly 100 million active users, primarily driven by its expansion in Brazil [4][9]. - Financially, NU's revenue grew by 40% year-over-year, with net income increasing by 74%, and average revenues per active customer rose by 17% year-over-year on a foreign exchange-neutral basis [5][9]. - The company’s non-performing loan (NPL) ratio increased by 60 basis points, indicating strong underwriting and risk management [6]. - Regulatory approval for its banking license in April enhances NU's product capabilities and growth potential in both Brazil and Mexico, with expectations of an 8% CAGR in the Latin American fintech market from 2025 to 2030 [7]. Group 2: Dave (DAVE) - DAVE reported a 46% growth in ExtraCash originations in Q1 2025, contributing to a 47% increase in revenues and a remarkable 235% rise in adjusted EBITDA year-over-year [8][9]. - The member base grew by 15% year-over-year, with 569,000 new members added, reflecting strong demand for its services [8]. - DAVE's proprietary underwriting engine, CashAI, improved credit performance, resulting in an 18% year-over-year enhancement in the 28-day delinquency rate and a reduction in credit loss provisions [10]. - The company’s non-GAAP variable profit surged by 67% year-over-year, with a significant increase in variable margin [11]. - DAVE's focus on the U.S. market presents opportunities for expansion as the global fintech market is expected to grow at a 15.3% CAGR from 2025 to 2030 [12]. Group 3: Financial Estimates and Valuation - The Zacks Consensus Estimate for NU's 2025 sales is $14.8 billion, indicating a 28.5% year-over-year growth, while earnings are expected to rise by 20% [13]. - For DAVE, the 2025 sales estimate is $474.4 million, suggesting a 36.7% year-over-year growth, with earnings projected to surge by 66.8% [13]. - NU is trading at a forward P/E ratio of 20.21X, slightly below its median, while DAVE is at 24.64X, lower than its median of 33.74X, indicating that NU appears cheaper compared to DAVE [16].