NU - Nu Holdings Ltd.
Nu Holdings Ltd. delivered Q1 results exceeding my expectations, with revenue up 57.6% and net income up 56.4% YoY. Despite strong results, NU shares dropped 8% on concerns over rising NPLs, increased cost to serve, and fluctuating Mexico deposits. I view these concerns as largely seasonal or strategic, with management proactively addressing credit risk and funding optimization.
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Nu Holdings is down to $12.69 following Q1 2026 results. My updated base case points to a meaningful upside by 2026. I remain focused on NU's scale, efficiency, and long-term potential despite the recent earnings miss.
Stocks trading under $20 often get dismissed as lottery tickets, but every so often a genuine compounder slips into that bucket because sentiment has cracked while fundamentals remain intact.
When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important?
Nu Holdings (NU) demonstrates robust growth and profitability, with a 29% ROE and expanding loan portfolio despite recent earnings volatility. Q1 saw strong revenue growth and customer expansion, but higher expected credit losses and declining ROE pressured short-term results. NU's forward P/E near all-time lows (~14x) offers compelling value given its execution, market leadership, and long-term growth prospects.
Nu Holdings has declined over 35% but remains a high-growth, high-ROE bank with substantial runway in Brazil and Mexico. In Brazil, NU captures only 7% of the profit pool and has minimal SME penetration, suggesting significant untapped domestic opportunity. NU's Mexican operations are now breakeven, with less than 1% market share in a rapidly growing, underbanked market.
Zacks.com users have recently been watching Nu (NU) quite a bit. Thus, it is worth knowing the facts that could determine the stock's prospects.
Nu Holdings reported Q1 revenues up 42% FXN to $5.3B, but the stock had a post-earnings dip driven by higher credit losses. The digital bank reported a credit loss increase attributed to seasonality and portfolio growth, not asset quality deterioration; NPL ratios remain stable. NU trades at a valuation far below its >30% projected growth, offering a compelling entry point amid market overreaction to credit risks.
With short-term rates still elevated, tariff uncertainty churning through earnings models, and credit spreads widening at the margins, balance sheet quality has quietly become the most underrated factor in equity selection.
Nu Holdings is initiated at a buy rating, with the recent stock selloff seen as a long-term buying opportunity. NU's resilient YoY customer and financial metrics, including 42% revenue growth and improved efficiency, underscore strong execution despite mixed QoQ trends. Forward P/E of 13.83 reflects excessive market pessimism, as Nu continues to expand market share and invest heavily in Brazil.
Today, May 18, 2026, investors weigh record-breaking Q1 profits against rising credit costs and margin pressure at this digital bank.
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I reinforce my buy rating on Nu Holdings despite a mixed Q1 marked by higher delinquency and provisioning. NU's credit portfolio grew 40% YoY, with credit cards as the main driver, but rising NPLs and provisions spooked investors. Net income rose 41% YoY to $871 million, though ROE fell to 29% and NIM declined sequentially—key metrics to monitor ahead.
Nu Holdings Ltd. (NYSE:NU) shares are trading lower Friday after the company reported mixed first-quarter financial results.
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NU NYSE: NU executives said the digital banking company delivered another quarter of customer growth, revenue expansion and operating leverage, while emphasizing that higher credit provisions in the first quarter reflected seasonality, portfolio growth and product mix rather than deterioration in underlying asset quality.
Nu Holdings Ltd. (NU) Q1 2026 Earnings Call Transcript