Investors might look at top businesses like Visa, Mastercard, or JPMorgan Chase when aiming to put money to work in the financial sector. But Nu Holdings (NU -6.03%), perhaps a company you might not be familiar with yet, should be on your radar as a potential buying opportunity.

With this fintech stock trading 13% off its peak price from mid-September, does it deserve a spot in your portfolio right now? Here are three reasons this might be so.

1. Nu's tremendous growth trajectory

According to management, Nu is the largest digital banking platform outside of Asia, and as such it has no physical presence. Its fully online financial services provide customers with a wide range of products to fit their needs.

The company noticed an unmet need in Latin America, and so it quickly launched to tremendous success. It has a strong position in its original market, Brazil. And in recent years, it was launched in Mexico and Colombia. As of this writing, Nu has 105 million customers, which is up tenfold from just five years ago.

Having more users, unsurprisingly, leads to robust sales growth. Top-line gains have been nothing short of spectacular. Revenue totaled $2.8 billion in the three-month period that ended June 30, up 65% year over year.

What's encouraging for investors is that there is still a sizable runway for expansion. It is estimated that about 70% of the population of Latin America is unbanked or underbanked, so most people are still not fully being served by the banking system. As these countries see their economies develop and internet and smartphone penetration rise, Nu can continue to register impressive growth for a very long time.

2. Profits are through the roof

Most hypergrowth businesses pour all their financial resources into bringing on more users, at the expense of the bottom line. This is where Nu stands out in a good way.

This is now a consistently profitable company. It generated $487 million in net income in the second quarter, translating to a 17% net profit margin. In the year-ago period, the margin was 12%, so there is clearly something positive happening here.

I mentioned before how Nu doesn't operate physical bank branches. This helps to reduce overhead, which likely has helped earnings to increase. It is also reporting generally higher average revenue per active customer with each passing quarter. And at the same time, the cost to serve a customer has remained the same for four straight quarters. These wonderful unit economics are a key part of the company's financial success.

3. Not an excessive valuation

Nu shares have been a huge winner, soaring 223% since the start of 2023. During that same period, the S&P 500 has put up a total return of 54%. The market appears to be very bullish on the business.

The current price-to-earnings ratio (P/E) of about 42 doesn't necessarily draw in bargain hunters. However, when you consider the impressive trajectory that Nu is on, it's not crazy to still want to own shares. The forward P/E of 31 is far more reasonable, and it indicates a rapidly rising bottom line.

Investors who might still be hesitant should understand that Berkshire Hathaway has been a shareholder since Nu's initial public offering in December 2021. The Warren Buffett-led conglomerate owns 2.2% of the company, which is another vote of confidence that this is a high-quality enterprise with meaningful potential that looks like a smart stock to buy right now.