Did Strong Q2 Earnings and Citi Upgrade Just Shift Nu Holdings' (NU) Investment Narrative?

• Nu Holdings released its second-quarter 2025 earnings, reporting net interest income of US$2.10 billion and net income of US$636.84 million, both higher than the prior year.
• Citi Research subsequently upgraded Nu Holdings, emphasizing the company's strong earnings momentum and solid asset quality even amid wider macroeconomic challenges.
• We'll now consider how Citi Research’s recent upgrade, anchored in earnings strength, could inform Nu Holdings' long-term investment narrative.

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Nu Holdings Investment Narrative Recap

Nu Holdings’ investment case centers on confidence in its ability to capture the expanding Latin American digital banking market, leveraging technology and scale to sustain robust customer and revenue growth over time. The company’s strong Q2 2025 earnings and Citi Research’s upgrade reinforce momentum in the near term, signaling earnings strength as a key catalyst; however, these results do not materially alter the main risk of heightened exposure to subprime loan segments during economic or rate volatility.

Among its recent announcements, the addition of former Brazilian Central Bank president Roberto Campos Neto as Vice Chairman and Global Head of Public Policy stands out. This move is significant in the context of Nu’s ongoing multi-country expansion, offering expertise to navigate regulatory environments, a factor closely tied to both its growth catalysts and exposure to evolving compliance risks as it broadens its reach.

By contrast, investors should be aware that a large and growing proportion of loan growth remains concentrated in less mature credit segments…

Read the full narrative on Nu Holdings (it's free!)

Nu Holdings' outlook anticipates $29.6 billion in revenue and $5.7 billion in earnings by 2028. This requires a 71.6% annual revenue growth rate and a $3.4 billion increase in earnings from the current $2.3 billion.

Uncover how Nu Holdings' forecasts yield a $16.36 fair value, a 17% upside to its current price.

Exploring Other Perspectives

Fair value estimates from 39 Simply Wall St Community members span from US$9.47 to US$51.91 per share. While some expect rapid earnings growth to continue, others point to Nu Holdings’ high non-performing loan ratio as a caution on profitability ahead; explore these contrasting perspectives.

Explore 39 other fair value estimates on Nu Holdings - why the stock might be worth 32% less than the current price!

Build Your Own Nu Holdings Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Nu Holdings research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Nu Holdings research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Nu Holdings' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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