Nubank (NU): Buy, Sell, or Hold Post Q3 Earnings?

Over the past six months, Nubank’s shares (currently trading at $14.55) have posted a disappointing 5.9% loss, well below the S&P 500’s 4.8% gain. This might have investors contemplating their next move.

Following the drawdown, is now an opportune time to buy NU? Find out in our full research report, it’s free.

Why Are We Positive On Nubank?

With well over one hundred million customers across Brazil, Mexico, and Colombia through its viral member-get-member referral program, Nubank (NYSE:NU) is a digital banking platform that offers financial services including spending, saving, investing, borrowing, and protection products to millions of customers across Latin America.

1. Skyrocketing Revenue Shows Strong Momentum

A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul.

Luckily, Nubank’s revenue grew at an incredible 77.2% compounded annual growth rate over the last five years. Its growth surpassed the average financials company and shows its offerings resonate with customers.

2. Outstanding Long-Term EPS Growth

Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.

Nubank’s full-year EPS flipped from negative to positive over the last three years. This is a good sign and shows it’s at an inflection point.

Final Judgment

These are just a few reasons why Nubank ranks near the top of our list. After the recent drawdown, the stock trades at 17.3× forward P/E (or $14.55 per share). Is now the right time to buy? See for yourself in our full research report, it’s free.

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