TLDR
- Nu has 114 million members with strong growth in Brazil and expansion into Mexico and Colombia
- Revenue increased 50% year over year in Q4 2024, with net income rising from $360.9M to $552.6M
- Berkshire Hathaway sold 53% of its Nu holdings in Q4 2024 amid currency concerns
- The company maintains a low-cost digital banking model with decreasing cost to serve
- Several institutional investors increased their holdings in Q1 2025, despite mixed analyst ratings
Nu Holdings is building a digital banking empire from its base in Brazil. The company has captured more than half of Brazil’s population on its platform and continues to grow rapidly.
The all-digital bank ended 2024 with 114 million members. This represents an increase of 20.4 million users year over year.
The vast majority of Nu’s customers (101.8 million) are in Brazil. Despite already having significant market penetration, Nu continues to add new Brazilian customers at a high rate.
Nu’s growth isn’t just about adding new users. The company is successfully getting customers to use more of its products.
Average revenue per active customer increased 23% to $10.70 in the fourth quarter of 2024. This growth was measured on a currency-neutral basis.
The company’s expansion beyond Brazil is just beginning. Nu is seeing even faster growth in Mexico and Colombia than it experienced in Brazil.
Nu uses the same cross-selling strategy in these new markets. This approach has been successful in Brazil and should drive growth for years to come.
The company’s financial results reflect its successful business model. Revenue increased 50% year over year in the fourth quarter of 2024.
Net income improved from $360.9 million to $552.6 million during the same period. This profit growth is possible because Nu’s digital platform is less capital-intensive than traditional banks.
Nu’s cost to serve actually decreased year over year in the fourth quarter from $0.90 to $0.80. This improved efficiency helps drive profitability.
Berkshire Hathaway sold 53% of their Nu position
Warren Buffett’s Berkshire Hathaway made headlines by selling 53% of its Nu position in the fourth quarter of 2024. This selling contributed to negative investor sentiment.
Currency concerns, particularly regarding the Brazilian Real, have also worried some investors. However, these concerns may not reflect Nu’s strong operational performance.
Institutional investors continue to show interest in Nu. Oak Grove Capital LLC increased its position by 101% during the fourth quarter.
Several other large institutional investors also increased their stakes. State Street Corp grew its position by 105.9%, and Baillie Gifford & Co. increased its substantial holding by 13%.
Mixed opinions on Nu
Analyst opinions on Nu are mixed. According to MarketBeat, the company has a consensus rating of “Hold” with a price target of $15.47.
Some analysts have recently lowered their price targets. UBS Group reduced its target from $15.50 to $15.00, and JPMorgan Chase lowered its target from $15.00 to $14.00.
Citigroup downgraded Nu from “neutral” to “sell” and dropped its price target from $14.60 to $11.00 in December. However, Susquehanna raised its price target from $16.00 to $18.00 in November.
As of March 5, 2025, Nu’s stock was trading at $10.46. This represents a decline from both its 52-week high of $16.15 and its 6-month average price.
The company currently has a market cap of approximately $50 billion. Nu’s price-to-earnings ratio stands at 26.14, reflecting investor expectations for continued growth.
Nu stock has experienced some volatility in recent months. The company’s 52-week range spans from $9.67 to $16.15.
For investors with some appetite for risk, Nu offers exposure to the growing fintech sector in Latin America. The company has proven its model in Brazil and is replicating that success in new markets.
With continued double-digit growth in both users and revenue, Nu remains positioned to reward long-term investors despite recent stock price weakness.
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