Now, identifying a business with a bit of pep is always a boon for the discerning investor, don’t you agree? It requires, of course, a certain amount of conviction, a dash of patience, and the ability to remain unruffled when the market decides to have a bit of a wobble. Your portfolio, should you succeed, will offer grateful thanks, most assuredly.
It’s rather worth a closer look, this fintech establishment, showing no signs of flagging, what! The shares, while having taken a bit of a tumble from their previous high – a mere 21%, you understand – have positively soared 216% over the last three years (as of March 5th). And there’s a jolly good reason to believe this upward trajectory will continue, wouldn’t you say?
Allow me to present, then, one monster stock to hold for the next five years. A capital idea, what!
Reporting Results That Are Rather Spiffing
Nu Holdings (NU +0.62%) continues to make it remarkably easy for investors to be optimistic, a most agreeable state of affairs. Their latest financial results were, to put it mildly, impressive. A thoroughly good show, all around.
During the fourth quarter of 2025 (ending December 31st), revenue jumped a robust 45% year over year to $4.9 billion. An acceleration compared to the previous quarter, you note. Nu added a staggering 4 million net new customers in the period, bringing the total to 131 million. A positively teeming mass of clientele!
And profits? They grew at a rate even faster than the top line. Net income soared a handsome 50% in Q4. Nu has achieved some truly remarkable unit economics that support its earnings. The average cost to serve a customer – a mere $0.80, you understand – is significantly below the average revenue per customer of $15. A most efficient arrangement, wouldn’t you agree?
A Latin American Bank Taking a Plunge into the U.S.
Up until now, Nu has been operating solely within Latin America. They have established a truly fantastic position in their home market of Brazil, where a remarkable 62% of the adult population are customers. They are also building a budding presence in Mexico and Colombia. Operating a digital bank that benefits from technological progress in an emerging region has, naturally, supported Nu’s expansion. A bit like a well-aimed punt, wouldn’t you say?
Now, Nu has set its sights on the U.S. They recently obtained a bank charter, and operations will commence within 18 months. This, of course, will invite stiff competition in a financial services industry that is, shall we say, rather more developed than the one in Latin America. A bit of a challenge, perhaps, but nothing a bit of pluck and ingenuity can’t overcome.
“We’re going to have a very targeted strategy,” CEO David Vélez said on the Q4 2025 earnings call about the U.S. A sensible approach, I should think. One doesn’t simply barge into a crowded room, does one?
Perhaps this represents a maturation phase, setting the stage for future growth to moderate. Sell-side analysts, however, expect revenue to increase at a compound annual rate of 32% between 2025 and 2028. Not a bad clip, wouldn’t you say?
Shares Trade at a Valuation That’s Rather Attractive
It’s hard to believe that, with Nu’s strong fundamentals, the stock still trades at a forward price-to-earnings ratio of 18.7. That’s cheaper than the S&P 500 index, you note. In my view, this setup makes Nu a no-brainer stock to buy and hold. A capital idea, indeed!
However, the market might be pondering the risks. Like any bank, Nu must prove that its credit quality can hold up in various economic scenarios, as it has a sizable loan book of $33 billion, mostly consisting of the credit card portfolio. There’s no reason to worry just yet, as non-performing loans actually improved year over year in Q4. A reassuring sign, wouldn’t you agree?
While this is something that should be closely monitored, I give the leadership team the benefit of the doubt. And that supports my argument to buy Nu. A thoroughly sound investment, I believe. A bit of a triumph, what!
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2026-03-10 13:02