Digital bank Nu Holdings (NU 2.00%) has a market capitalization of $72 billion — and that makes it a sizable business. However, many American investors might not know that much about the company because it operates in Latin America and has no U.S. presence.

Here’s a perfect example of why it’s important to understand that there are investment opportunities in international markets. This fintech stock might prove that point. Should you buy Nu Holdings while it’s trading below $16? Here’s why that might be a smart decision.

Customer additions and revenue growth are through the roof

The market loves a good growth story — and Nu Holdings is exactly that. The company’s customer base went from 65 million at the end of Q2 2022 to 123 million as of June 30. In Nu’s home country of Brazil, the business counts 60% of the adult population as its customers. Newer markets of Mexico and Colombia are registering remarkable success, even though Nu’s penetration is still in the early stages in these countries.

Nu is benefiting from some notable tailwinds. It helps that internet and smartphone penetration in Latin America continue to grow. This provides a favorable backdrop for a digital-only bank like Nu to find broader adoption.

Essentially, Nu is riding the wave of the Latin American economy’s development. Given that a large portion of the population here is still unbanked or underbanked, Nu still has lots of potential for growth.

The company’s revenue increased 29% year over year in Q2. Wall Street consensus sell-side analyst estimates believe the top line will rise by 67% between 2025 and 2027. That outlook should make shareholders excited.

Nu’s focus on product innovation should help it reach more customers. Management has also hinted at entering new countries in the future, basically replicating strategies that have worked so well in its existing markets.

This is an extremely profitable enterprise

Companies that have access to cheap capital usually care about growth more than anything else when it comes to strategic priorities. That’s why over the past decade or so, some businesses have put up huge gains, adding customers and increasing sales rapidly. The issue, however, is that these companies don’t care about profits.

Nu bucks this trend and stands out. It’s an extremely profitable enterprise, which might be a surprise to many. Nu registered $1.2 billion in net income through the first six months of 2025. That translated to a phenomenal net profit margin of 17.4%. The margin has generally increased in recent years, which underscores the company’s ability to scale up in a lucrative manner.

Investors should pay attention to the unit economics. It cost the company $0.80 per month in Q2 to serve the average customer. But on the flip side, the average revenue per active customer came in at $12.20. After viewing these two figures, it makes sense why the leadership team is trying to grow so quickly.

Nu also has the advantage of not running any physical bank branches. A brick-and-mortar retail strategy like this would entail sizable operating expenses. Nu avoids this, which can help drive higher margins over time.

This fintech stock trades at a reasonable valuation

In the past three years, Nu’s shares have skyrocketed 262% (as of Oct. 16), thanks to incredible fundamental performs that has caught the market’s attention. After such a phenomenal gain, investors might be questioning the stock’s appeal. The last thing you’d want to do is overpay.

That’s certainly not the case here. The valuation still looks very compelling. Investors can buy the stock at a forward price-to-earnings ratio of 18.7. At under $16 per share, there is sizable upside over the next five years from the possibility of both higher earnings and valuation expansion.

Neil Patel has no position in any of the stocks mentioned. The Motley Fool recommends Nu Holdings. The Motley Fool has a disclosure policy.

Arielle’s head is spinning from the seemingly contradictory advice she hears about the best investments to hedge against inflation and a possible recession. What’s she missing?

Dave is curious about private investments after listening to a recent First Friday episode. What are they, and should he consider them for his portfolio?

Abbey is stoked about the raise she negotiated for her first job out of school. But she’s worried about liability risk related to her new position. How does she protect herself? 

Former financial planner Joe Saul-Sehy and I tackle these three questions in today’s episode.

Enjoy!

P.S. Got a question? Leave it here.

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Arielle asks (1:47): If gold and other inflation-resistant assets are so popular right now, why are some experts warning investors to stay away?

 I’ve heard you say in recent episodes that, given the current inflationary environment—and the possibility of a recession—many investors are turning toward assets like gold, art, and real estate, which are seen as inflation-resistant or more stable.

At the same time, you’ve also warned against predatory advisors or businesses pushing those very types of assets, especially to new investors. That left me confused. 

If seasoned investors are heading in that direction, but there are also bad actors promoting the same thing, how should a beginner like me make sense of it?

Can you help clarify how to think about gold, bonds, and other “inflation-proof” assets, especially as someone just starting to invest in the stock market?

Dave asks (36:17):  What exactly are private investments, and should we be paying attention?

I was listening to the First Friday episode where Paula talked about accredited investors and investing in private markets. That caught my attention, but I realized I don’t know much about what that means.

What kinds of private investments are out there? And how do they fit into the broader conversation we’ve been having around things like the efficient frontier, real estate, or mutual funds?

Could you shed some light on what these private investments look like—and when, if ever, they might make sense for someone like me?

Abbey asks (1:05:42):   What advice would you give to someone just starting a career as a 1099 worker?

A while back, I called in with a question about whether to invest money earmarked for tuition, assuming student loans would always be a backup. Well… let’s just say things didn’t play out the way I expected. 

Interest rates rose, markets dropped—and I learned some valuable lessons along the way. (Including one that confirms Joe was right.)

Fast-forward to now: I’ve graduated, landed a new job, and, thanks to your advice, successfully negotiated a significantly better contract—including a higher hourly rate, a more flexible schedule, and a much bigger signing bonus.

The new position is 1099, and I have a few questions as I navigate this transition. I’m 26 with $115,000 in student loans at rates between five and nine percent. I also have $70,000 in a Roth, $50,000 in a 403(b), and $10,000 in an HSA.

Do I need an accountant and/or tax strategist, and how should I go about finding one? I’m also entering the field of nurse anesthesia and feel a bit anxious about liability as a new grad. What steps should I take to protect myself financially and legally?

 

Resources Mentioned:

Interview with Nick Maggiulli

 

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