Nubank's subsidiary, Nu Mexico, has successfully secured a banking license from Mexico’s National Banking and Securities Commission. This achievement marks a significant milestone as Nu Mexico becomes the first Popular Financial Society to transition into a fully licensed bank.
This new status allows Nu Mexico to broaden its range of financial services, with future plans including the introduction of a payroll account. However, the company must first complete a regulatory audit before it can commence banking operations.
The approval sets the stage for Nubank, known by the ticker NU, to enhance its presence in the Mexican financial market by offering a more comprehensive suite of banking products and services.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 17 analysts, the average target price for Nu Holdings Ltd (NU, Financial) is $13.82 with a high estimate of $18.90 and a low estimate of $7.70. The average target implies an upside of 17.65% from the current price of $11.75. More detailed estimate data can be found on the Nu Holdings Ltd (NU) Forecast page.
Based on the consensus recommendation from 17 brokerage firms, Nu Holdings Ltd's (NU, Financial) average brokerage recommendation is currently 2.5, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Nu Holdings Ltd (NU, Financial) in one year is $29.25, suggesting a upside of 148.94% from the current price of $11.75. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Nu Holdings Ltd (NU) Summary page.
NU Key Business Developments
Release Date: February 20, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Nu Holdings Ltd (NU, Financial) experienced significant customer growth, reaching over 114 million customers with 20.4 million net additions in 2024.
- The company saw a 55% increase in total deposits, reaching $28.9 billion, bolstering its liquidity position.
- Revenues grew by 58% year over year on an FX neutral basis, driven by sustained growth in active customer base and strong ARPU levels.
- Net income doubled from 2023, closing at nearly $2 billion with an annualized return on equity of 28%, placing NU among the most profitable financial institutions globally.
- The efficiency ratio improved, dropping below the 30% mark to 29.9%, making NU one of the most efficient global financial services platforms.
Negative Points
- The net interest margin contracted by 70 basis points to 17.7%, primarily due to lower credit yields and increased funding costs.
- The company's loan to deposit ratio remains low at below 40%, indicating potential inefficiencies in balance sheet optimization.
- There is a deliberate deceleration in the expansion of certain financing products due to concerns over second-order impacts on customer engagement and NPS.
- The rapid growth in new geographies like Mexico and Colombia has initially attracted customers with lower ARPU levels, impacting consolidated activity rates.
- Despite strong growth, the company faces challenges in maintaining profitability in new markets due to higher funding costs and competitive pressures.
