NU
Nu Holdings Ltd.
$13.76
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Overvalued
Trading 33.0% above fair value
You pay
$13.76
Bear
$7.24
Fair
$10.35
Bull
$13.45
Bear
$7.24
-47.4%
ROTCE 20.0% → 2.90x TBV
Fair
$10.35
-24.8%
ROTCE 25.0% → 4.00x TBV
Bull
$13.45
-2.3%
ROTCE 30.0% → 4.00x TBV
Key Value Driver
ROTCE (27.9%) vs. cost of equity (9.5%)
Implied Market Multiple
6.48x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $14.98 from 22 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $10.35 per share.
Warnings
Traditional cash flow models don't work well for banks — lending activity distorts how much cash the business actually generates.
Common valuation shortcuts don't apply here — for banks, interest payments are a core business cost, not overhead.
Wall Street's average price target is $14.98 (from 22 analysts). Our estimate is 41% below the consensus -- consider that gap carefully.
Key Risks
- Book value quality matters as much as level — check loan loss reserves
- Interest rate sensitivity creates non-linear earnings surprises
- Insurance reserving is actuarial, not financial — errors emerge slowly