Is Nu Holdings Stock a Buy, Sell, or Hold With Shares 20% Below Their 52-Week High?

Nu Holdings (NYSE: NU) is a fast-growing bank based in Brazil, and it's changing the way people manage money in its region. It's expanding into new markets and adding millions of new customers annually.

Nu stock is 20% off its high, though, and it's quite cheap. Is this a value trap or a buying opportunity?

Revolutionizing banking in Brazil

Revolutionizing is a pretty big word, but Nu has been breaking down barriers to financial access for mass consumers in Brazil and opening up financial products that had previously been available mostly to affluent consumers. Its digital app and low fees appeal to a broad swath of the public, and today, even the affluent are joining the platform.

Image source: Nu.

In the 2026 second quarter, Nu onboarded 4 million new customers, bringing the total to 139 million. Most of them, or 118 customers, are still in Brazil, where it has broadly penetrated the population. However, it still sees strong monetization opportunities. It's mostly underpenetrated in the high-income population, where it accounts for only 2% of the addressable gross profit market, and in small businesses, where it accounts for 18%.

But it's making its move into newer markets all the same. It's growing fast in Mexico, where it already has 16.5% of the adult market as customers and has become the largest digital bank in the country since receiving its official bank charter in June. Nu also received a bank charter for Brazil in July, so investors will hear more about the impact in the next earnings report.

Nu also has operations in Colombia, where its total customer base grew to 5 million in the second quarter, and it has applied for a bank charter in the U.S.

In total, revenue increased 39% year over year in the second quarter, and net income increased 49%, surpassing $1 billion. Average revenue per user (ARPU) increased to $17.10 from $11.60 last year, which is impressive given the number of new users. It has a cross-sell strategy, and customers who have been on the platform longer have higher ARPU, indicating the strategy is working and implying there's a long growth runway for increasing this figure.

Is Nu stock a buy at this price?

So why is Nu stock down? The market seems concerned about credit risk as Nu expands its credit business. Metrics improved in the second quarter, which is likely why the stock has been climbing since the report.

Nu is a high-growth fintech company as well as a bank. Using the standard price-to-book ratio for banks, it looks expensive, trading at 5.5 times book value. However, you have to consider that it's growing much faster than a standard bank and also has much greater opportunities. It trades at 20 times trailing-12-month earnings, which looks like a bargain.

Putting it together, Nu stock looks like a great buy today for the patient, long-term investor.

Jennifer Saibil has positions in Nu Holdings. The Motley Fool has positions in and recommends Nu Holdings. The Motley Fool has a disclosure policy.