Nu Holdings(NYSE: NU) stock has tested investors' nerves amid a volatility roller coaster. From a spectacular 155% two-year return between 2023 and 2024, shares of the financial technology (fintech) giant, recognized as Latin America's largest digital bank, are currently down approximately 37% from their 52-week high. While this drop is disappointing, the company's continued growth and climbing profitability suggest underlying resiliency that deserves a closer look.
Is now the time to buy the dip in shares of Nu Holdings ahead of a possible sustained rebound? Here's what you need to know.
A high-growth fintech leader
With 114 million customers across Brazil, Colombia, and Mexico, Nu Holdings has emerged as one of the world's largest and fastest-growing digital banking platforms. The company has capitalized on a transformation in the region where an expanding middle class and surge in smartphone penetration over the past decade created a perfect storm for its disruptive dominance in the sector.
In three years since the company's initial public offering (IPO), total revenue climbed from $1.7 billion in 2021 to $11.5 billion in 2024 (through the period ended Dec. 31.), representing a spectacular average annual growth rate of 89%. A large part of that monetization success is based on the high proportion of customers utilizing Nu as their primary bank, increasingly activating more products, including credit cards. In 2024 alone, the total lending portfolio grew by 45% year over year alongside other impressive performance metrics, such as a 55% increase in the deposit base driving an even stronger 57% rise in Q4 net interest income.
That momentum in its scale alongside improving financial efficiency helped 2024 adjusted earnings per share (EPS) reach $0.46, up 84.5% compared to 2023.
Image source: Getty Images.
Why shares of Nu Holdings declined
Despite reporting results many companies would envy, Nu's stock price has been week. A few factors might explain this.
The market appears concerned about a growth slowdown, at least compared to the blistering pace seen in prior years. Revenue increased 43% in 2024, moderating from 68% growth in 2023 while Wall Street analysts tracked by Yahoo! Finance project that growth will slow moderately to 29% in 2025. There are also some signs that margins may have peaked due to ongoing customer acquisition costs. For 2025, analysts expect earnings per share (EPS) of $0.56, a solid 22% higher than 2024, yet marking a notable deceleration.
Overall, Nu Holdings is in an excellent fundamental position, even as the market seems to have pulled back expectations.
Metric
2024
2025 Estimate
Revenue
$11.5 billion
$14.8 billion
Revenue growth (YOY)
43.4%
28.8%
Adjusted EPS
$0.46
$0.56
Adjusted EPS growth (YOY)
84.5%
21.7%
Data source: Yahoo! Finance.
Opportunity amid the sell-off
What I like about Nu Holdings is its unique international profile with exposure to key emerging markets. This aspect is particularly important considering the renewed economic jitters in the United States as investors assess the impact of new trade tariffs being implemented by the Trump administration. Nu Holdings is relatively isolated from these issues, operationally driven more by conditions in its local markets.
The silver lining to its stock price sell-off is that it has brought Nu Holdings' shares down to what I believe is now a compelling valuation. At just 18 times the consensus 2025 earnings-per-share (EPS) estimate, the stock's forward price-to-earnings (P/E) ratio is well below the high of 50 it commanded this time last year. Assuming the company continues to generate profitable growth, the stock could prove to be a bargain at the current level.
Perhaps the biggest recent development from Nu Holdings is its comments about plans to enter new countries, eyeing an eventual global expansion. While a formal announcement is planned for later this year, a roadmap to this next phase in the company's hypergrowth trajectory could be the catalyst necessary for the stock to make a new all-time high.
I believe Nu Holdings is a buy now, and I predict its share price will be higher by this time next year. The company remains a fantastic growth story, well positioned to reward shareholders over the long run. One strategy to consider is dollar-cost averaging as a method of adding the stock to your portfolio over time to mitigate near-term risks.
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