Nu Holdings (NYSE:NU): Valuation Insights After Record Results and Landmark Amazon Brazil Partnership

Nu Holdings (NYSE:NU) shares have grabbed attention after the company posted record net income and outpaced revenue forecasts in its latest quarterly update. The announcement of a new partnership with Amazon Brazil also fueled optimism.

See our latest analysis for Nu Holdings.

Nu Holdings’ shares have surged over 60% year to date, with the latest momentum accelerating after the record quarterly results and a landmark partnership announcement. With a multi-year total shareholder return of over 320%, investors are clearly recognizing both strong recent execution and the company’s long-term growth potential.

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With the stock trading near all-time highs and analysts raising their targets, the central question now is whether Nu Holdings remains undervalued or if the market is already pricing in its next chapter of growth potential.

Most Popular Narrative: 3.3% Undervalued

Nu Holdings' most popular valuation narrative prices the company at $17.98 per share, slightly above the last close of $17.39. With a fair value that nudges past current levels, the market is signaling just a modest undervaluation, raising the stakes for what analysts expect next.

The ongoing transition from cash to digital payments and online banking in historically underserved markets continues to accelerate Nu's transaction volumes and increases opportunities for cross-sell and ecosystem stickiness, supporting robust net margin expansion as digital penetration deepens.

Read the complete narrative.

Want to know what’s fueling the buzz around Nu’s potential? The narrative hinges on ambitious revenue expansion, tightening margins, and a forward-looking profit multiple that sets high expectations. Wondering just how optimistic the growth and earnings projections are? Read the full narrative to uncover the numbers driving this bold valuation.

Result: Fair Value of $17.98 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, rising competition from established banks and increased exposure to subprime loans could pose challenges to Nu Holdings' growth outlook in the coming years.

Find out about the key risks to this Nu Holdings narrative.

Another View: SWS DCF Signals Overvaluation

While the prevailing narrative sees Nu Holdings as modestly undervalued, our DCF model presents a different perspective. It estimates a fair value of $10.14 per share, indicating that Nu is trading well above what our cash flow projections suggest. Does this point to overheating, or are analysts overlooking something in their earnings outlook?

Look into how the SWS DCF model arrives at its fair value.

Build Your Own Nu Holdings Narrative

If you see the numbers differently, or want to dig in and tell your own story, you can shape your narrative in just minutes. Do it your way

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.

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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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