This Brilliant Fintech Stock Is Down 32%. Buy It Before It Sets a New All-Time High.

Brett Schafer, The Motley Fool

Sun, Mar 9, 2025, 7:55 AM 5 min read

Nobody enjoys banal drawdowns. They tin supply buying opportunities for high-quality businesses, sure, but it is ne'er amusive to spot your idiosyncratic wealthiness spell down successful value. Right now, stocks listed successful the United States person entered a flimsy drawdown, with galore faster-growing and higher-volatility names heading into immoderate steep declines.

One banal connected my radar is Nu Holdings (NYSE: NU). The fiscal exertion (fintech) institution focused connected the Latin American marketplace is successful a 32% drawdown arsenic of this writing, adjacent aft reporting much stellar net for the 4th fourth of 2024.

Shares look reasonably inexpensive today, and with a agelong runway to turn revenue, users, and profits, I deliberation the banal volition beryllium mounting an all-time precocious successful the not-so-distant future.

The satellite is moving to integer banking. Eventually -- astatine slightest for user banking -- slope branches volition beryllium a happening of the past. This is existent not conscionable successful the United States, but astir the world.

Nu Holdings absorption saw the accidental successful integer and mobile banking erstwhile they founded the concern implicit 10 years ago, bringing a mobile banking exertion to the Brazilian market. Nu Bank is the result.

A fintech level that is present utilized by implicit fractional of the big Brazilian population, it has taken the state by tempest and upended accepted fiscal institutions. For a national successful Brazil, Nu Bank tin connection services for each your idiosyncratic concern needs. This means slope accounts, recognition cards, investing, idiosyncratic loans, and adjacent insurance. With an intuitive modern interface, the level has grown similar gangbusters successful Brazil and present has adjacent to 100 cardinal users.

Nu Holdings gross deed $3 cardinal past quarter, up 50% twelvemonth implicit year. In 2021, gross was conscionable $636 cardinal successful the 4th quarter. Most of this maturation is owed to the Brazil market, wherever Nu Bank is present generating adjacent to $10 cardinal successful yearly revenue. That is mighty awesome for a institution that lone entered the Brazilian marketplace 10 years ago.

With implicit 50% of the big colonisation utilizing the service, Nu Holdings is approaching idiosyncratic saturation successful its location marketplace of Brazil. This does not mean gross maturation volition stall out, though. There are 2 cardinal reasons wherefore Nu Holdings gross tin support increasing astatine a speedy rate.

First, determination is plentifulness of country for gross to turn from existing Brazilian customers. According to its lawsuit cohort analysis, older Nu Bank users make an mean of $25 successful gross per month, compared to $10 for Nu Bank overall. In simpler terms, the longer you are a lawsuit with Nu Bank, the much gross you make for them. Over the adjacent fewer years, the tens of millions of customers Nu Bank acquired successful the past fewer years should commencement utilizing the level much often, which volition pb to much consolidated gross growth.