Nu .(US:NU) ZACKS·2025-12-05 16:26Core Insights - Nu Holdings' primary strength lies in its increasing revenue durability, which allows the company to convert a large customer base into recurring income streams that are less affected by macroeconomic fluctuations [1] - The company has shifted focus from user growth to monetizing its existing user base through a diverse range of financial services, resulting in a 39% year-over-year revenue increase to $4.2 billion in Q3 2025 [2] - Nu Holdings is expanding high-engagement products, which enhances average revenue per user and provides stability against market volatility [3] Revenue and Growth - The company added over 4 million new users in Q3 2025, bringing its total customer base to 127 million, with an activity rate exceeding 83% [1] - The disciplined approach to expanding everyday transaction services, low-cost deposits, and cross-selling has led to a more predictable revenue model [3] - The technology-driven cost structure allows for efficient margin enhancement as more products are adopted by existing users [4] Competitive Landscape - Comparisons with Block and SoFi Technologies highlight the potential for Nu Holdings to develop a multi-product financial platform that increases user engagement and revenue durability [5][6] - Block's ecosystem and SoFi's diversified product offerings serve as benchmarks for Nu Holdings' growth strategy [5][6] Valuation and Performance - Nu Holdings' stock has increased by 47% over the past year, slightly outperforming the industry average growth of 46% [7] - The company trades at a forward price-to-earnings ratio of 21.55X, significantly higher than the industry average of 10.71X, indicating a premium valuation [9] - The Zacks Consensus Estimate for NU's 2025 earnings has been rising, reflecting positive market sentiment [10]