Nu Holdings (NASDAQ:NU)

Nu Holdings (NASDAQ:NU)

Nu Holdings is a relative lightweight compared to Visa and Mastercard, with its mere $53.6 billion market cap. The Brazil-based digital bank has enjoyed exceptional growth as it expanded its financial services (think no-fee credit and debit cards) into emerging nations. I’ll admit, it was the bold investment made by Berkshire Hathaway (NYSE:BRK.B) a few years ago that put NU stock on my radar.

Though shares of NU represent a small portion of the Berkshire portfolio (around 0.3% as of the latest quarter), there’s no denying that Nu Holdings has many traits of a “wonderful” business.

And even though shares are scorching hot again, I can’t help but stay bullish on the company’s plans to bring new payment technologies to high-growth Latin American markets. High-growth technology meets high-growth emerging markets? That sounds like a formula for sustainably high growth rates to me.

In the latest fourth quarter, NU clocked in $2.4 billion in sales, up just north of 12% year-over-year. That’s not bad, given recent macro headwinds. The bigger headline, though, was that CEO David Velez noted Nu is “investing heavily in new growth avenues” to drive profit.

With sights set on “the 100 million customers milestone in 2024,” I find it hard to give up on the fintech darling. At 25.3 times forward price-to-earnings, NU stock seems like an even better bargain than Visa or Mastercard, as it aims to bring banking services to the masses.

What Is the Price Target of NU Stock?

NU stock is a Strong Buy, according to analysts, with three unanimous Buys assigned in the past three months. Nonetheless, the average NU stock price target of $11.33 implies 1.05% downside potential.