Where Will Nu Holdings Stock Be in 1 Year?

Key Points

• Nu’s top-line growth is slowing down as it saturates its core Brazilian market.

• Its expansion into Mexico and Colombia will squeeze its near-term margins.

• It still looks cheap relative to its long-term growth potential.

• 10 stocks we like better than Nu Holdings ›

Nu Holdings (NYSE: NU), the parent company of Nubank, Latin America's top digital bank, hasn't impressed too many investors since its IPO. It went public on Dec. 8, 2021, at $9, started trading at $11.25, and rallied to a record closing price of $15.89 on Nov. 11, 2024. But on April 4, 2025, Nu's stock closed at its lowest post-IPO price of $9.01.

It nearly took a round trip back to its IPO price as investors fretted over rising interest rates, currency headwinds, and political instability in Brazil and Mexico; the saturation of its mature markets, and its expansion into newer, lower-margin markets to plant its seeds for future growth. However, Nu's stock now trades at about $13 a share. Let's see why it bounced back over the past four months, and where it might be headed over the next year.

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Image source: Getty Images.

How fast did Nu grow after its IPO?

As a digital-only direct bank, Nu can expand at a much faster rate than its brick-and-mortar competitors. From the end of 2021 through the second quarter of 2025, its total number of customers surged from 33.3 million to 122.7 million, its activity rate (its active customers divided by total customers) rose from 76% to 83%, and its average revenue per active customer (ARPAC) jumped from $4.50 to $12.20. That rapid growth was driven by its three biggest markets -- Brazil, Mexico, and Colombia -- and the expansion of its ecosystem with more credit cards, lending services, e-commerce services, and cryptocurrency trading tools.

From 2021 to 2024, Nu's revenue grew at a CAGR of 89%. It turned profitable on a generally accepted accounting principles (GAAP) basis in 2023, and its net income surged 91% in 2024. Its profits rose as economies of scale kicked in, it kept its average monthly cost to serve each active customer steady, and it streamlined its platform with more generative AI services. Those numbers looked impressive, but the economic and political risks in its top markets cast dark clouds over its future. The devaluation of the Brazilian real against the U.S. dollar was another major issue: Nu is based in Brazil, but it reports its earnings in U.S. dollars.

What happened to Nu over the past year?

Despite those challenges, Nu's activity rate is holding steady, its ARPAC is rising, and its average costs for serving those active customers are staying comfortably below $1. Those core strengths, along with a broader buying frenzy in high-growth stocks, pulled Nu's stock back from its post-IPO lows. But if we look at its performance over the past year, we'll notice that its year-over-year growth in total customers and revenue is still cooling off.

Data source: Nu Holdings. YOY = Year-over-year. *Currency-neutral basis.

That slowdown can be attributed to the saturation of its top market, Brazil, where it already serves over 60% of the adult population; increased competition from similar fintech platforms like MercadoLibre's Mercado Pago, and a more cautious expansion of its credit business as its percentage of non-performing loans gradually rises.

As Nu's top-line growth decelerated, its gross and net interest margins declined. That compression was caused by its deeper expansion into Mexico and Colombia, which both required higher funding costs and credit loss allowances than Brazil, and the expansion of its lower-risk (but lower-margin) secured lending and payroll-backed loans. On the bright side, those margins expanded sequentially in its latest quarter and stabilized its stock price.

Data source: Nu Holdings. YOY = Year-over-year. *Currency-neutral basis.

Nu only serves 13% and 10% of the adult populations of Mexico and Colombia, respectively, so it still has plenty of room to expand. However, that expansion could squeeze its near-term margins and throttle its earnings growth. That pressure, along with the persistent macro headwinds in Latin America, is still weighing down its stock.

Where will Nu's stock be in a year?

For 2025, analysts expect Nu's revenue and earnings per share (EPS) to rise 29% and 36%, respectively. For 2026, they expect its revenue and EPS to grow 24% and 38%, respectively. Those are stellar growth rates for a stock that trades at 17 times next year's earnings.

If Nu matches analysts' expectations and trades at a more generous 25 times forward earnings, its stock could rise about 46% to $19 a share within the next 12 months. But for that to happen, the economic and political situation in Brazil needs to stabilize, and Nu needs to tightly control its expansion in Mexico and Colombia so it doesn't crush its margins.

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Leo Sun has positions in MercadoLibre. The Motley Fool has positions in and recommends MercadoLibre. The Motley Fool recommends Nu Holdings. The Motley Fool has a disclosure policy.