Investing in fintech enterprises could add upside to investors' portfolios. This is a powerful secular trend that continues to disrupt the traditional banking sector. And there is a thriving business in this space that deserves a closer look.
This could be one of the best fintech stock buying opportunities I've seen in years.
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Growth and profits continue to soar
Nu Holdings (NU +0.82%) is a fintech powerhouse that operates in Latin America, with 110 million customers in Brazil (its biggest market), 13 million in Mexico, and 4 million in Colombia. The company runs a massive digital banking platform, providing customers with a broad range of financial services.
The company's growth has been spectacular, with revenue up 42% year over year in Q3 (ended Sept. 30). Nu reported a stellar net profit margin of 18.8% that quarter. On a consensus basis, sell-side analysts expect sales and earnings per share to increase at compound annual rates of 30% and 37%, respectively, between 2025 and 2027.
NYSE: NU
Key Data Points
An opportunity like this is rare
If a business is putting up the financial gains Nu is, investors might think the valuation is too expensive. That's simply not the case. It's quite the opposite actually.
As of Jan. 20, Nu shares trade at a forward price-to-earnings ratio of 20.7. This is a bargain compared to the 22.3 multiple of the S&P 500 index. Investors are being presented with a very favorable setup to buy this top fintech stock.
