1 Unstoppable Fintech Stock Is Up 196% in 3 Years: Here's the Single Biggest Risk With Investing in It Right Now.

It makes sense that U.S. investors stick to American companies when building their portfolios. Focusing on businesses in the home country you're familiar with can offer confidence when putting your hard-earned money into the market. However, top performers in other regions of the world shouldn't be ignored.

There is an unstoppable non-U.S. fintech stock, for example, that has skyrocketed 196% over the last three years (as of April 27), essentially tripling investor capital. However, don't rush to buy shares in this fintech just yet. There's a big risk you need to know about first.

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Investors should be impressed by Nu's fundamentals

From 2022 to 2025, Nu Holdings (NYSE: NU) reported annualized revenue growth of 50%. Its customer base expanded by 76% during that time, while the bottom line upgraded from a $9.1 million net loss to net income of almost $2.9 billion. With fundamental gains like this, it's no wonder the stock has performed so well.

Nu dominates in Brazil, its most critical market, where 62% of the adult population is a customer. In Mexico, no business issues more new credit cards than this one. In Colombia, Nu nearly doubled its deposit base year over year in Q4. The company is in the regulatory approval process in the U.S., with plans to establish a presence here next year.

It's difficult to be bearish, especially because the average revenue per active customer of $15 is 1,775% greater than the $0.80 it costs to serve each of them.

Geography is an opportunity and a risk

Nu clearly has a strong market position in Latin America. The three countries in which it operates have a combined population of 400 million. And many people in the region are still unbanked or underbanked. That's the opportunity Nu is taking advantage of.

But Latin America also presents uncertainty, which I view as the biggest risk factor investors should pay attention to. Brazil, Mexico, and Colombia have economies that can be heavily dependent on commodities, currencies that are subject to volatile fluctuations, and inflationary pressures. Plus, there's geopolitical risk and high crime rates.

Investors based in the U.S. might not fully appreciate these things since they're not a huge concern stateside. But for a financial services entity that engages in lending and takes on credit risk in Latin America while also being exposed to spending activity, this adds a layer of risk that investors should monitor going forward. If conditions in these countries deteriorate unexpectedly, Nu's financials could take a hit.

This fintech stock's valuation adds upside

While Nu's trailing-three-year gain is jaw-dropping, it currently trades 22% below its record high from late January. As a result, investors might find that the valuation is attractive, perhaps reflecting the geographic risk mentioned.

This fintech stock can be purchased at a forward price-to-earnings ratio of just 20.2, which is cheaper than the S&P 500. Now's the time to consider adding this winner to your portfolio, even though the risk should be monitored.

Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nu Holdings. The Motley Fool has a disclosure policy.