This Could Be 1 of the Best Bank Stock Buying Opportunities I've Seen in Years
Key Points
NuBank has grown rapidly over the past five years.
It will continue to expand as income levels and internet penetration rates rise.
Macro issues in Latin America are compressing Nu’s valuations.
- 10 stocks we like better than Nu Holdings ›
Nu (NYSE: NU) is one of Latin America's fastest-growing fintech companies. It owns NuBank, the region's largest direct bank, and its online-only model enabled it to expand much faster than its traditional brick-and-mortar competitors in Brazil, Mexico, and Colombia.
From the end of 2021 to the third quarter of 2025, NuBank's customer base more than doubled from 53.9 million to 127.0 million, while its activity rate (the ratio of its active customers to total customers) expanded from 76% to 83%. Its average revenue per active customer (ARPAC) also nearly tripled, from $4.50 to $13.40, as it locked in users through its newer fintech services.
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Image source: Getty Images.
Why is the right time to invest in Nu?
From 2024 to 2027, analysts expect Nu's revenue to grow at a CAGR of 30% as its EPS -- which turned positive in 2023 and nearly doubled in 2024 -- rises at a CAGR of 41%. Those are exceptional growth rates for a stock that trades at 22 times this year's earnings.
Nu's valuations are likely being compressed by the geopolitical tensions, inflationary headwinds, and currency devaluation issues in Latin America. However, it should continue to expand over the next decade as those headwinds dissipate. So if you expect Nu to remain at the top of the region's fertile fintech market as income levels and internet penetration rates rise, then it's one of the best banking stocks you can buy in this choppy market.
Should you buy stock in Nu Holdings right now?
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Leo Sun has no position in any of the stocks mentioned. The Motley Fool recommends Nu Holdings. The Motley Fool has a disclosure policy.
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