Today’s Change
Current Price
Nu Holdings (NU +0.74%), a Latin American digital banking and financial services provider, closed Monday at $12.29, up 0.78%. The stock moved as traders continued to reassess Nu’s recent record Q1 results against rising credit provisions and margin pressures. Investors are watching how profitability holds up as loan growth and digital banking expansion continue. Trading volume reached 59.4 million shares, nearly 11% above its three-month average of 53.3 million shares. Nu Holdings IPO’d in 2021 and has grown 19% since going public.
How the markets moved today
S&P 500 slipped 0.07% to finish Monday’s session at 7,403, while the Nasdaq Composite fell 0.51% to close at 26,091. In digital banking and financial technology, peers were mixed: SoFi Technologies closed at $15.71, up 0.64%, while PagSeguro Digital ended at $9.18, up 3.61%.
What this means for investors
Nu’s stock dropped roughly 10% last week after it narrowly missed analysts’ expectations with its Q1 earnings. However, the company inched higher today, in part due to news that Coatue Management raised its Nu holdings from 29 million shares to 40 million in the latest quarter. Furthermore, while Nu’s earnings were slightly disappointing, the company’s long-term outlook remains impressive.
In Q1, Nu:
- grew customers by 13%
- saw average revenue per active customer rise to $16 from $12
- reached a record efficiency ratio of 18%
- raised its net income by 56%
- delivered steady credit quality
Trading at 19 times earnings, Nu remains a promising growth stock in my eyes, despite its short-term focused earnings “miss.”
Josh Kohn-Lindquist has positions in Nu Holdings and SoFi Technologies. The Motley Fool has positions in and recommends Nu Holdings. The Motley Fool recommends PagSeguro Digital. The Motley Fool has a disclosure policy.
