This Could Be 1 of the Best Fintech Stock Buying Opportunities I've Seen in Years
Key Points
This company is a leader in Latin America’s financial services industry, with a massive customer base.
The stock trades at a cheaper forward price-to-earnings ratio than the S&P 500.
- 10 stocks we like better than Nu Holdings ›
Investing in fintech enterprises could add upside to investors' portfolios. This is a powerful secular trend that continues to disrupt the traditional banking sector. And there is a thriving business in this space that deserves a closer look.
This could be one of the best fintech stock buying opportunities I've seen in years.
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Growth and profits continue to soar
Nu Holdings (NYSE: NU) is a fintech powerhouse that operates in Latin America, with 110 million customers in Brazil (its biggest market), 13 million in Mexico, and 4 million in Colombia. The company runs a massive digital banking platform, providing customers with a broad range of financial services.
The company's growth has been spectacular, with revenue up 42% year over year in Q3 (ended Sept. 30). Nu reported a stellar net profit margin of 18.8% that quarter. On a consensus basis, sell-side analysts expect sales and earnings per share to increase at compound annual rates of 30% and 37%, respectively, between 2025 and 2027.
An opportunity like this is rare
If a business is putting up the financial gains Nu is, investors might think the valuation is too expensive. That's simply not the case. It's quite the opposite actually.
As of Jan. 20, Nu shares trade at a forward price-to-earnings ratio of 20.7. This is a bargain compared to the 22.3 multiple of the S&P 500 index. Investors are being presented with a very favorable setup to buy this top fintech stock.
Should you buy stock in Nu Holdings right now?
Before you buy stock in Nu Holdings, consider this:
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Neil Patel 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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