Nu Holdings (NU +6.61%) is one of the world's fastest-growing fintech companies. It owns NuBank, the largest digital-only bank in Latin America. By streamlining its digital services and offering a fee-free credit card, it expanded much faster than its brick-and-mortar competitors. It also expanded its ecosystem with more loans, e-commerce services, and crypto trading tools.
From 2021 to 2025, Nu's year-end customer base grew from 54 million to 131 million, its activity rate (active customers divided by total customers) expanded from 76% to 83%, and its monthly average revenue per customer (ARPAC) more than tripled from $4.50 to $15. Even as it added customers at that blistering pace, its average cost per active customer held steady.
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In the first quarter of 2026, Nu's total customers rose to 135 million, its activity rate held steady at 83%, and its monthly average revenue per customer grew to $16.
Those growth rates were incredible, yet Nu's stock has still declined about 25% this year and trades at just 12 times next year's earnings. Is it an undervalued growth play in this frothy market?
Why did Nu's stock decline?
From 2021 to 2025, Nu's revenue grew at a 75% CAGR. It turned profitable in 2023, and its EPS nearly doubled in 2024 and rose 45% in 2025. From 2025 to 2028, analysts expect its revenue and EPS to grow at CAGRs of 31% and 35%, respectively.
NYSE: NU
Key Data Points
Those growth rates are impressive, but three issues are compressing its valuations. First, it's expanding more aggressively into Mexico and Colombia to reduce its dependence on its core Brazilian market.
That expansion increased its credit risks, since both markets require higher funding costs and credit loss allowances than Brazil. Nu's expansion of its lower-margin secured lending and payroll-backed loan businesses exacerbated that pressure.
Second, Nu earns most of its revenue in Brazilian Reais, Mexican Pesos, and Colombian Pesos but reports its earnings in U.S. dollars. As a result, it faces persistent headwinds from a strong U.S. dollar -- which will only become stronger if the Fed raises its rates this year. Lastly, the market still values Nu like a conventional bank rather than a high-growth fintech company.
Is Nu's stock a screaming bargain?
I believe Nu's stock is a bargain at these levels. It's in the process of securing full bank charters in Mexico and a conditional approval in the U.S. to reduce its funding costs and expand its reach. It also recently launched a new $1.0 billion buyback program.
It won't bounce back anytime soon, but it could attract a lot more attention once its Mexican and Colombian markets mature, the dollar weakens, and investors value it as a growth play again.
