Nu .(US:NU) ZACKS·2026-01-08 18:51Core Insights - Nu Holdings' most compelling differentiator is its improving revenue durability, transforming a vast customer base into recurring income streams less exposed to macroeconomic swings [1] - The company added over 4 million new users in Q3 2025, expanding its customer base to 127 million while maintaining an activity rate above 83% [1][8] - Revenue growth is driven by deepening monetization across various financial services, with a 39% year-over-year increase in currency-neutral revenues to $4.2 billion in Q3 [2][8] Revenue and Customer Growth - The evolution from rapid customer acquisition to monetization across payments, credit, savings, and insurance positions Nu Holdings for resilient performance amid tightening credit conditions [2] - The disciplined product strategy emphasizes high-engagement financial products, enhancing average revenue per active user and smoothing quarterly variability [3] Cost Structure and Competitive Advantage - Nu Holdings' technology-first platform allows for effective operating leverage, avoiding the heavy infrastructure costs of traditional banks [4] - The growing revenue durability provides a strategic advantage that can justify premium valuation multiples and support consistent shareholder returns [4] Peer Comparisons - Block serves as a relevant comparison, showcasing a multi-product financial platform that grows wallet share as users adopt more services [5] - SoFi Technologies demonstrates how cross-selling can convert a fast-growing user base into a stable revenue engine, highlighting the benefits of diversified product expansion [6] Valuation and Market Performance - Nu Holdings' stock has surged 57% over the past year, outperforming the industry's 54% growth [7] - The company trades at a forward price-to-earnings ratio of 20.73X, significantly above the industry's 11.1X [9] - The Zacks Consensus Estimate for NU's 2025 earnings has been rising, with the stock currently holding a Zacks Rank 2 (Buy) [11]