Nu Holdings combines 28% base-case growth, 33% ROE, and a low forward P/E with substantial Mexico monetization upside, though credit-cycle risk remains material.
Overview
Nu Holdings, through Nubank, is Latin America’s largest digital banking platform, serving underbanked consumers and SMEs through a mobile-first, branchless model. Revenue comes primarily from net interest income and fees, including credit-card interchange, lending, asset management, brokerage, and penalties. Brazil remains the mature core with nearly 118 million customers, while Mexico reached 16 million customers and achieved operational breakeven in Q1 2026; Colombia exceeded 5 million customers. **The model combines a structural cost advantage with strong customer engagement:** monthly cost-to-serve is approximately $0.80, NPS exceeds 80, and more than 80% of additions are organic. Q2 2026 gross revenue rose 39% year over year to $5.9 billion, net income increased 49% to $1.1 billion, ROE was 33.0%, and risk-adjusted NIM expanded to 12.4%. At $13.56, forward P/E is 13.3x–15.1x, below SoFi’s 24.7x, despite a projected base-case revenue CAGR of 28% through 2031. Near-term catalysts include Mexico and Colombia monetization, secured-credit expansion, AI-enabled underwriting, and a $1.0 billion buyback. The principal debate is whether credit losses and emerging-market risk justify the discount.