1 hour ago
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Jennifer Saibil, The Motley Fool
Sun, May 31, 2026 astatine 2:22 PM CDT 3 min read
Nu Holdings (NYSE: NU) is simply a Brazil-based online slope that's disrupting concern successful Latin America. The erstwhile Warren Buffett banal trades down astir 31% from its precocious aboriginal successful 2026 contempt phenomenal performance. Let's spot wherefore it's a large company, wherefore the banal is down, and whether oregon not this is simply a buying opportunity.
What's caller astatine Nu
Nu has scaled and go a fiscal powerhouse successful Brazil. It claims much than fractional of that country's big colonisation arsenic customers, and it has go the largest backstage fiscal instauration successful the country. It has a precocious monthly enactment complaint of 83%, up from 78% successful 2022, with 100 cardinal progressive customers successful Brazil.
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While the Brazilian marketplace mightiness beryllium saturated, the institution inactive sees important opportunities to cross-sell and summation engagement. It has little than 7% of the gross nett opportunity, and it's switching gears from focusing connected attracting caller members to selling much and higher-fee products.
It has plentifulness of different ways to grow, too, astir acutely successful expansion. It's making a concerted effort to replicate its Brazil occurrence successful Mexico, wherever its maturation is outpacing the archetypal task successful Brazil, and it's taking it up a notch by obtaining a due slope charter to grow its activities. While it's inactive onboarding customers successful Mexico astatine a accelerated gait -- from 2.1 cardinal successful 2022 to 15 cardinal contiguous -- it has little than 1% of the gross nett marketplace share. The Brazil concern has been profitable capable to support the vessel afloat and money caller ventures, but the Mexico concern broke adjacent successful the archetypal quarter, and the concern is starting to wage off.
Nu besides operates successful Colombia, its adjacent maturation market, and it precocious received a slope charter successful the U.S., wherever its plans stay to beryllium seen.
High growth, higher hazard
Nu's enlargement into much markets and much recognition products comes with a cost, some successful wealth and successful recognition exposure. Nu famously has a debased cost-to-serve per customer, and it has remained beneath $1 for the past fewer years, up until the 2026 archetypal quarter, wherever it deed $1.
Most immoderate institution needs to put to grow. The marketplace doesn't similar to spot higher costs, due to the fact that they summation risk, arsenic does recognition exposure. But signing up caller groups to recognition products, which mostly increases default rates, is portion of however it tin grow and summation marketplace share.
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