NU (NYSE:NU) Issues Earnings Results

NU (NYSE:NU) issued its quarterly earnings results on Thursday. The company reported $0.22 earnings per share for the quarter, topping the consensus estimate of $0.20 by $0.02, FiscalAI reports. The firm had revenue of $5.88 billion during the quarter, compared to the consensus estimate of $5.39 billion. NU had a return on equity of 32.81% and a net margin of 18.65%.

Here are the key takeaways from NU’s conference call:

• Nu Holdings surpassed $1 billion in quarterly net income for the first time, reaching $1.1 billion, up 49% year over year, with a 33% return on equity. Gross revenue rose 39% to nearly $5.9 billion, while the customer base reached 139 million.
• Mexico received regulatory approval for Nu’s banking license, allowing the company to offer payroll deposits, higher-insured deposits, and broader credit products to its 16 million-plus customers. Management sees Mexico as a potentially very large opportunity, with faster monetization and lower cost-to-serve than Brazil.
• Risk-adjusted net interest margin expanded to a record 12.4%, helped by strong loan growth, a more unsecured-loan-weighted mix, lower credit costs, and balance-sheet optimization. Management said it expects margins to remain in the current range, while cautioning that 12.4% is not a floor.
• The credit portfolio grew 37% year over year to $39.4 billion, and management reported no broad-based weakening in consumer credit, citing 244% coverage of 90-plus-day delinquencies. However, 90-plus-day delinquency increased 35 basis points sequentially to 6.9%, with executives attributing the broader upward trend primarily to portfolio mix and seasonality.
• Nu is expanding monetization through new customer segments and technology, including the Chroma subscription tier for “super core” Brazilian customers, SME products, and its nuFormer AI platform. AI is already used across underwriting, support, marketing, and product decisions, while operating expenses are expected to preserve long-term leverage with a full-year efficiency ratio near 20%.

NU Price Performance

NYSE:NU traded up $1.32 during mid-day trading on Friday, hitting $15.25. 156,329,470 shares of the company’s stock traded hands, compared to its average volume of 76,778,272. NU has a 1 year low of $11.20 and a 1 year high of $18.98. The company has a market cap of $74.03 billion, a PE ratio of 20.60, a price-to-earnings-growth ratio of 0.56 and a beta of 0.94. The company has a debt-to-equity ratio of 0.36, a quick ratio of 0.58 and a current ratio of 0.58. The firm’s 50 day simple moving average is $13.51 and its 200 day simple moving average is $14.38.

Analyst Ratings Changes

A number of research analysts have recently issued reports on NU shares. Needham & Company LLC boosted their price target on shares of NU from $17.00 to $19.00 and gave the stock a “buy” rating in a research note on Friday. JPMorgan Chase & Co. increased their target price on NU from $18.00 to $20.00 and gave the stock an “overweight” rating in a research note on Tuesday, July 7th. Weiss Ratings reaffirmed a “hold (c+)” rating on shares of NU in a report on Friday, August 7th. Bank of America reissued an “underperform” rating on shares of NU in a report on Tuesday, June 2nd. Finally, UBS Group cut their price target on shares of NU from $18.10 to $16.90 and set a “buy” rating for the company in a report on Wednesday, May 20th. Ten investment analysts have rated the stock with a Buy rating, four have issued a Hold rating and one has issued a Sell rating to the stock. According to MarketBeat, NU currently has an average rating of “Moderate Buy” and an average target price of $17.66.

Institutional Trading of NU

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. EdgePoint Investment Group Inc. raised its position in shares of NU by 25.3% in the fourth quarter. EdgePoint Investment Group Inc. now owns 17,012 shares of the company’s stock valued at $285,000 after buying an additional 3,439 shares during the last quarter. Brooklyn Investment Group boosted its holdings in shares of NU by 40.0% during the fourth quarter. Brooklyn Investment Group now owns 16,295 shares of the company’s stock worth $271,000 after purchasing an additional 4,653 shares during the last quarter. Storgate LLC purchased a new stake in shares of NU in the fourth quarter valued at $236,000. OMERS ADMINISTRATION Corp acquired a new position in NU in the fourth quarter valued at $227,000. Finally, Wexford Capital LP acquired a new stake in NU in the 3rd quarter worth about $208,000. Hedge funds and other institutional investors own 84.02% of the company’s stock.

Trending Headlines about NU

Here are the key news stories impacting NU this week:

• Positive Sentiment: Record profitability: Second-quarter net income exceeded $1 billion, up 49% year over year, while revenue rose 39% to approximately $5.9 billion. Adjusted earnings of $0.22 per share surpassed the $0.20 consensus estimate, and revenue also topped expectations. Nubank quarterly net profit beats estimates
• Positive Sentiment: Strong operating metrics: NU’s customer base reached 139 million, activity rates improved and monthly revenue per active customer increased 22% year over year. Risk-adjusted profit margin reached a record 12.4%, supported by credit growth, risk controls and low costs per customer. Nu Holdings Q2 analysis
• Positive Sentiment: Growth outlook remains favorable: Management said margins could remain near current levels as artificial intelligence improves efficiency, credit performance remains resilient and the company expands its banking operation in Mexico. NU Q2 earnings call focuses on margins, AI and Mexico
• Positive Sentiment: Analyst and trading support: Needham raised its price target from $17 to $19 and maintained a Buy rating. Unusually heavy call-option activity also indicates increased bullish positioning, although it may add short-term volatility. Needham raises NU price target

NU announced that its Board of Directors has approved a share buyback plan on Thursday, June 4th that allows the company to repurchase $0.00 in outstanding shares. This repurchase authorization allows the company to repurchase shares of its stock through open market purchases. Shares repurchase plans are often an indication that the company’s management believes its shares are undervalued.

NU Company Profile

Nu Holdings Ltd (NYSE: NU), commonly known by its consumer brand Nubank, is a Latin American financial technology company that provides digital banking and financial services through a mobile-first platform. The company’s core offerings include no-fee digital checking accounts, credit cards, personal loans, payments and transfers, and a range of savings and investment products. Nubank emphasizes a streamlined customer experience delivered via its smartphone app, combined with data-driven underwriting and automated customer service tools.

Founded in 2013 by David Vélez, Cristina Junqueira and Edward Wible, Nu grew rapidly by targeting underbanked and digitally savvy consumers in Latin America with low-fee, transparent products.