Wall Street Is Sleeping on This Fintech Giant—Here’s Why It Could Double

Despite fast growth, high profitability and an extraordinary runway ahead, Nu Holdings (NYSE:NU)’s share price is down almost 24% in the last month as stock markets have sold off in response to weaker economic conditions in the US in 2025. This leaves the question of whether NU could be a good buy today for long-term gains.

Where could Nu Holdings stock be in the next 5 years, and is now the time to buy the stock on the dip while its price is low?

Key Points

• NU’s revenue surged 58% and profits nearly doubled, but shares fell 24% amid market selloff.

• With 114M+ customers and growth in Mexico and Argentina, NU is tapping into a massive unbanked market.

• At 26.3x earnings, NU looks cheaper than before, with analysts forecasting a 36% gain and potential to double by 2030

Will High Margins Make Nu A Super Compounder?

While NU share prices tumbled, the financials have been nothing short of stunning. Last year, the top line for the year totaled $11.5 billion, a 58% increase from a year earlier while the bottom line rose to $1.97 billion, nearly double what the company was able to achieve in 2023.

Profitability is the ace in the back pocket for shareholders, a fact that could make it a strong long-term compounder as its revenues climb. Management reported that the monthly cost to serve an active customer was a minuscule $0.80. Such a low service cost makes it extremely profitable for Nu to scale its customer base.

Nu’s net margin, return on equity and return on invested capital are all well above 20%. These metrics are all quite good signs for shareholders and indicate that Nu Holdings is generating strong returns across its growing business lines.

Notably, a total of 20.4 million customers last year were added, bringing the overall customer base to about 114 million, including passing the 10 million customer mark in Mexico, a country that could hold significant opportunities for Nu’s banking services.

Slightly more than half of Mexico’s population is still unbanked, making the country extremely attractive for a company like Nu that can provide financial services via a mobile platform.

What Does Nu’s Potential Growth Look Like in the Coming Five Years?

In the next half-decade, several trends could keep Nu’s revenues and earnings growing. To begin with, Brazil’s economy is expected to grow toward an estimated GDP of about $4.44 trillion by 2030.

Persistent growth in Nu’s home market where over 100 million customers already use its services should provide the company with strong tailwinds. This is especially true in light of the fact that Nu is expanding beyond simple banking services and offering credit cards and other credit products.

It’s also worth noting that Nubank has potential beyond Brazil, Mexico and Colombia. Latin America as a whole is still underserved by traditional banking institutions, and economic growth throughout the region could present new opportunities for Nu Holdings.

Recently, for example, Nu Holdings’ CEO said that the company was taking a renewed look at Argentina, which has been going through critical economic shifts under the presidency of Javier Milei. While there is no guarantee that Nu will expand into Argentina, the availability of new markets close to home where its proven model is slated to work well is appealing to buyers sitting on the sidelines.

Do NU Shares Look Cheap After the Selloff?

At 26.3x earnings and 6.3x sales, it’s hard to say that NU looks particularly cheap at the moment. It’s worth noting, however, that the P/E ratio is far below what the stock has historically averaged. As recently as the end of Q1 2024, the stock was trading at over 45x earnings.

Analysts also still expect quite strong upward momentum from NU in the coming 12 months. The average price forecast for the stock is $14.43. Given that the price of NU shares has fallen to $10.60, this would imply a return of over 36% against current market rates. A mitigating factor is that ongoing bearish sentiment in the stock market could make these estimates overly optimistic.

Where Will Nu Holdings Stock Be in 2030?

By 2030, Nu Holdings is forecast to rise by almost 30% to $14.43 per share according to a 5-year discounted cash flow forecast analysis.

Nonetheless that may be pessimistic because it’s a fast-growing fintech company in a market that’s becoming increasingly volatile, it’s difficult to put exact numbers on where Nu Holdings could be five years from now. We can, however, make estimates about a possible range that the stock could trade in at the beginning of the next decade.

First, let’s consider the company’s earnings. Although it’s unlikely that earnings will continue to basically double year-over-year as they did between 2023 and 2024, it’s far from inconceivable that their growth rate could remain in double-digit territory for the next five years. Likewise, revenue growth is likely to slow from where it has been in the last year while still remaining relatively brisk.

If Nu Holdings can achieve a compounded net income growth rate of just 20% over the next five years, it will be generating about $4.9 billion in net income by the end of that period. Using a P/E of 20, a relatively conservative multiple compared to today’s number, the company could be worth around $98 billion. This is nearly double the $50.9 billion market cap it commands today.

Needless to say, these numbers could prove to be too conservative. A 20% earnings growth rate would be a significant reduction from present levels, and the P/E may not contract a huge amount if Nu’s prospects as a long-term compounder remain strong.

All told, it seems reasonable to suppose that NU could double or triple in the coming five years, putting the stock somewhere in between the $20-30 price range. It’s even possible that the stock could go higher than that if it advances as much as analysts currently project in the next 12 months alone.

Regardless of the exact price, Nu Holdings has many of the characteristics of a stock that could generate strong compounded returns over many years. The company has already built a strong moat in Brazil and is expanding its proven business model into new Latin American markets. With robust existing profitability and good growth opportunities ahead, NU could be a good stock to buy on the dip for investors who are willing to hold through volatile times as the company grows.