NU (NYSE:NU) Announces Earnings Results

NU (NYSE:NU) released its quarterly earnings data on Thursday. The company reported $0.22 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.20 by $0.02, FiscalAI reports. The business had revenue of $5.88 billion during the quarter, compared to analysts’ expectations of $5.39 billion. NU had a return on equity of 30.91% and a net margin of 18.20%.

Here are the key takeaways from NU’s conference call:

• Nu Holdings surpassed $1 billion in quarterly net income for the first time, reaching $1.1 billion, up 49% year over year, with a 33% return on equity. Gross revenue rose 39% to nearly $5.9 billion, while the customer base reached 139 million.
• Mexico received regulatory approval for Nu’s banking license, allowing the company to offer payroll deposits, higher-insured deposits, and broader credit products to its 16 million-plus customers. Management sees Mexico as a potentially very large opportunity, with faster monetization and lower cost-to-serve than Brazil.
• Risk-adjusted net interest margin expanded to a record 12.4%, helped by strong loan growth, a more unsecured-loan-weighted mix, lower credit costs, and balance-sheet optimization. Management said it expects margins to remain in the current range, while cautioning that 12.4% is not a floor.
• The credit portfolio grew 37% year over year to $39.4 billion, and management reported no broad-based weakening in consumer credit, citing 244% coverage of 90-plus-day delinquencies. However, 90-plus-day delinquency increased 35 basis points sequentially to 6.9%, with executives attributing the broader upward trend primarily to portfolio mix and seasonality.
• Nu is expanding monetization through new customer segments and technology, including the Chroma subscription tier for “super core” Brazilian customers, SME products, and its nuFormer AI platform. AI is already used across underwriting, support, marketing, and product decisions, while operating expenses are expected to preserve long-term leverage with a full-year efficiency ratio near 20%.

NU Stock Up 8.4%

Shares of NU stock traded up $1.18 on Friday, hitting $15.11. 120,532,557 shares of the company’s stock traded hands, compared to its average volume of 61,078,391. The company has a quick ratio of 0.58, a current ratio of 0.58 and a debt-to-equity ratio of 0.36. The firm’s 50-day moving average is $13.45 and its 200 day moving average is $14.37. The stock has a market cap of $73.34 billion, a P/E ratio of 23.18, a PEG ratio of 0.54 and a beta of 0.94. NU has a 52-week low of $11.20 and a 52-week high of $18.98.

Institutional Trading of NU

Institutional investors and hedge funds have recently made changes to their positions in the stock. Caitong International Asset Management Co. Ltd increased its stake in shares of NU by 14,810.0% in the fourth quarter. Caitong International Asset Management Co. Ltd now owns 1,491 shares of the company’s stock valued at $25,000 after purchasing an additional 1,481 shares during the period. Zions Bancorporation National Association UT purchased a new position in NU in the 4th quarter worth about $27,000. Hollencrest Capital Management acquired a new stake in shares of NU during the fourth quarter valued at approximately $33,000. EverSource Wealth Advisors LLC grew its holdings in shares of NU by 63.5% during the second quarter. EverSource Wealth Advisors LLC now owns 3,768 shares of the company’s stock valued at $52,000 after buying an additional 1,464 shares in the last quarter. Finally, Brown Brothers Harriman & Co. boosted its stake in shares of NU by 61.4% during the 4th quarter. Brown Brothers Harriman & Co. now owns 3,260 shares of the company’s stock valued at $55,000 after buying an additional 1,240 shares during the period. 84.02% of the stock is currently owned by institutional investors and hedge funds.

More NU News

Here are the key news stories impacting NU this week:

• Positive Sentiment: Record profit and major earnings beat: Nu reported its first quarterly net profit above $1 billion, up 49% year over year. Earnings of $0.22 per share exceeded the $0.20 consensus estimate, while revenue of $5.88 billion surpassed expectations of $5.39 billion. Reuters article
• Positive Sentiment: Strong growth and operating leverage: Revenue increased 39% year over year, supported by a customer base of approximately 139 million, higher engagement and a 22% increase in monthly revenue per active customer. Risk-adjusted profit margins reached a record 12.4%, while cost per customer remained low. Invezz article
• Positive Sentiment: Favorable outlook and analyst support: Management indicated that risk-adjusted margins could remain near current levels as artificial intelligence improves efficiency, credit performance remains solid and Nu expands its banking operations in Mexico. Needham raised its price target from $17 to $19 and maintained a “buy” rating, implying additional upside. Zacks article
• Neutral Sentiment: Options activity signals bullish speculation: Traders purchased 174,407 call options, more than double typical volume. This may reflect increased expectations for further gains, but options activity alone does not confirm sustained fundamental momentum.

Analyst Upgrades and Downgrades

Several analysts recently commented on the stock. JPMorgan Chase & Co. raised their price objective on shares of NU from $18.00 to $20.00 and gave the company an “overweight” rating in a research note on Tuesday, July 7th. Scotiabank lowered NU to a “sector perform” rating and set a $13.00 target price on the stock. in a research note on Wednesday, June 3rd. Bank of America reissued an “underperform” rating on shares of NU in a report on Tuesday, June 2nd. Susquehanna upped their price objective on NU from $13.00 to $16.00 and gave the company a “neutral” rating in a research report on Friday. Finally, UBS Group dropped their price objective on NU from $18.10 to $16.90 and set a “buy” rating for the company in a research report on Wednesday, May 20th. Ten investment analysts have rated the stock with a Buy rating, four have issued a Hold rating and one has assigned a Sell rating to the company. According to MarketBeat, the stock presently has a consensus rating of “Moderate Buy” and a consensus target price of $17.66.

NU announced that its board has initiated a stock buyback program on Thursday, June 4th that permits the company to buyback $0.00 in outstanding shares. This buyback authorization permits the company to buy shares of its stock through open market purchases. Shares buyback programs are often a sign that the company’s board of directors believes its stock is undervalued.

About NU

Nu Holdings Ltd (NYSE: NU), commonly known by its consumer brand Nubank, is a Latin American financial technology company that provides digital banking and financial services through a mobile-first platform. The company’s core offerings include no-fee digital checking accounts, credit cards, personal loans, payments and transfers, and a range of savings and investment products. Nubank emphasizes a streamlined customer experience delivered via its smartphone app, combined with data-driven underwriting and automated customer service tools.

Founded in 2013 by David Vélez, Cristina Junqueira and Edward Wible, Nu grew rapidly by targeting underbanked and digitally savvy consumers in Latin America with low-fee, transparent products.