Shares of the Brazilian fintech company Nu Holdings (NU -0.12%) had fallen about 9% as of 12:45 p.m. ET today after the company reported earnings results for the fourth quarter of 2021 yesterday after market close. The stock has been volatile on Wednesday, as shares of the digital banking company started the day up 8.4%.
Nu reported a loss of $0.04 per share in the fourth quarter on total revenue of nearly $636 million. Revenue in the fourth quarter was a record and made up about 37% of full-year revenue.
Nu added 5.8 million customers in the quarter and now has nearly 54 million. Total deposits grew to $9.7 billion, while total loans grew to more than $6.5 billion. Monthly average revenue per active customer (ARPAC) grew to $5.60, up nearly 72% from the fourth quarter of 2020.
CEO David Vélez said on the earnings conference call: "Nu has many different growth vectors to fuel its expansion over the coming decade. From continuing to grow our customer base, to offering new products, to geographic expansion, we are in the very early innings of this journey."
The quarter looked very solid, with big revenue growth, millions of new customers, and increasing ARPAC, which management expects to rise in 2022.
Nu stock has come down since going public and currently has a market cap of nearly $37 billion. That still gives it a very high valuation of 21.8 times trailing-12-month revenue in what has been a very difficult market for tech and fintech stocks with high multiples. But as the quarter showed, the company is growing like crazy.
I've been cautious on this one, given the high multiples, but I am starting to get more comfortable with Nu's high valuation over the long term. However, I would caution that there could be lots of volatility in the stock this year.