Nu .(US:NU) ZACKS·2025-10-17 18:41Core Insights - Nu Holdings Ltd. (NU) has experienced a 7% decline in stock price over the past month, which is greater than the broader industry's 2% decline [1][9] Company Performance - NU is rapidly scaling, adding over 4.1 million new customers in Q2 2025, bringing its total customer base to 122.7 million, a 17% year-over-year increase [3][9] - The average revenue per active customer exceeded $12 for the first time, reflecting an 18% year-over-year increase on a foreign-exchange-neutral basis, indicating improved customer engagement and unit economics [4][9] - Revenues grew by 40% year-over-year at FXN in Q2, driven by diversified income streams such as lending, interchange fees, and marketplace services [5][9] Market Position - NU's flagship product, NuBank, is transforming the banking experience in Brazil, while its expansion into Mexico and Colombia enhances its regional presence [6] - NU's competitive edge lies in its unmatched scale and speed of customer acquisition in emerging markets, setting it apart from U.S.-based peers like SoFi Technologies and Block [10][11] Financial Metrics - NU demonstrates strong capital efficiency with a trailing 12-month return on equity of 29.9%, significantly higher than the industry average of 11.4% [12] - The return on invested capital stands at 14.5%, well above the sector average of 3.4%, showcasing effective capital deployment [13] Valuation - NU's stock trades at a forward price-to-earnings multiple of 19.57, nearly double the industry average of 10.13, reflecting strong investor confidence in its growth potential [15] - Despite its impressive growth, the high valuation may lead to volatility, and a hold stance is currently deemed appropriate [18]