I Said This Fintech Growth Stock Was Bottoming Out in June, and I Was Right

Earnings season can be humbling, so I hope you allow me the opportunity to boast when given the chance. The last time I wrote about Nu Holdings (NYSE: NU) -- on June 3 -- the Latin American fintech was sliding. The parent company of Brazil's fast-growing NuBank was reeling from analyst downgrades and mounting headwinds.

I argued that it wasn't too soon to call a bottom on the stock, the same day it hit a 52-week low of $11.20. For now, I was right. Following weeks of upticks and a jump after posting blowout results after Thursday's market close, Nu has jumped almost 40% from its June low.

I guess it's time for another bold prediction: Nu's bounce is just getting started.

Image source: Getty Images.

Banking on a rebound

Nu Holdings has come a long way in a short time. The digital banking platform that launched in Brazil just a dozen years ago, in the form of a no-fee credit card for mass-market users, now reaches more than 62% of the country's adult population.

Thursday afternoon's financial update shows there is still significant growth potential for Nu and its shareholders. The fintech speedster is now serving 138.9 million accounts, a 13% increase over the past year.

That's decent, but here's where the story gets better: Revenue rose three times faster in the second quarter, climbing 39% to $5.9 billion. Many factors are driving this top-line surge, but it ultimately comes down to Nubank customers leaning more on the company for their financial needs.

The activity rate keeps inching higher with every passing quarter. Purchase volume continues to outpace account growth. Customer deposits have risen 18% over the past year. Its credit card and loan portfolio is now 37% larger than it was a year ago.

The result is that the monthly average revenue per active customer is now $17.10, a 22% leap over the past year. This has been the default setting for that juicy metric, which has more than doubled over the last four years. The same can be said about its accounts, and some pretty spectacular growth starts to happen when you stack those two metrics on top of one another.

The story gets even better on the bottom line. It still costs Nu roughly $1 a month to service an account. Scalability can be powerful, and this historically high-margin operator just delivered its first quarter of more than $1 billion in net income. Earnings surged 49% for the quarter. It easily exceeded expectations on both ends of the income statement.

Nu Holdings stock opened 13% higher on Friday after its blowout performance. But here's the kicker: Shares are still trading slightly lower in 2026.

The market was rattled a couple of months ago when Rob Livingston was named Nu's new CFO. It wasn't about him, as he's more than qualified, having served as Visa's former CFO for North America. Analysts had just warmed up to outgoing CFO Guilherme Lago, who took the company public in 2021 and helped instill a low-cost structure that has enabled Nu to deliver strong growth and improve margins.

There are also concerns as Nu delves deeper into offering loans, heightening credit risks and initial loan-loss provisions, which have weighed on Latin American bellwether MercadoLibre (NASDAQ: MELI). Both stocks are posting monster growth but are trading 6% to 8% lower year to date in an otherwise buoyant market.

The bottom line -- literally and figuratively -- is that Nu is pretty cheap for a company growing at a heady clip. You can buy Nu Holdings for less than 15 times next year's analyst profit target right now. You can also expect Wall Street pros to push their projections higher, driving forward earnings multiples lower, in the coming days.

I'm excited to see one of my favorite fintech stocks deliver. It conquered Brazil in a dozen years, and it's growing even faster in Mexico after officially becoming that country's largest digital bank this summer. Its third market -- Colombia -- has been slower to come around, but now Nu Holdings has its sights set on the U.S. market, where there is no shortage of Brazilians and other Latin Americans familiar with the Nubank brand.

I won't try to be cocky and call for a bottom the next time there is a substantial pullback, but it feels pretty good this time around.

Rick Munarriz has positions in MercadoLibre and Nu Holdings. The Motley Fool has positions in and recommends MercadoLibre, Nu Holdings, and Visa. The Motley Fool has a disclosure policy.