Nu Holdings (NYSE:NU) just posted record Q1 2026 results, reporting quarterly revenue of US$5b and net income of US$871.4m, as its customer base exceeded 135 million across Latin America.

Despite the strong Q1 print, Nu Holdings’ share price has been under pressure, with the stock down 12.3% on a 30-day share price return basis and 25.2% year to date. At the same time, the 3-year total shareholder return sits near 87.5%, suggesting long term momentum remains intact while short term sentiment has cooled following the earnings reaction and recent insider selling.

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With Nu’s share price pulling back despite record Q1 revenue of US$5b and net income of US$871.4m, investors may question whether this is a reset that leaves the stock undervalued or whether the market is already pricing in future growth.

Most Popular Narrative: 80.2% Undervalued

Against a last close of $12.73, the most followed narrative on Nu Holdings points to a fair value of $64.30, presenting a sharp valuation gap.

Latin American banking has historically been one of the most extractive industries on Earth. This is because Brazil's 5 largest banks have operated as a comfortable oligopoly for decades on end. Moreover they charge some of the highest fees in the world. Not only that but they offered poor service and faced almost zero new competition. Something you might find fascinating is that annual credit card interest rates in Brazil often exceed 300%. Additionally for the average person to open a bank account you would need extensive documents, in-branch visits and waiting time.

Want to see how this disruption story gets to that valuation gap? According to kabz2342, the narrative leans on compound earnings power, rising monetization per customer, and ambitious profitability assumptions across multiple markets.

Result: Fair Value of $64.30 (UNDERVALUED)

However, this bullish narrative still hinges on Nu managing tighter Brazilian banking regulations and sustaining profitability as it expands across new Latin American markets.

Another View: What P/E Says About Nu

That 80.2% undervaluation narrative sits alongside a very different signal. At a P/E of 19.4x, Nu trades well above both the US Banks industry at 11.5x and its peer average of 14.2x, and even above a 17.4x fair ratio that the market could move toward, which adds valuation risk if sentiment cools.

For a closer look at how those earnings multiples stack up against the rest of the sector, check the See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

With mixed signals on value, risk, and reward, now is the moment to look through the numbers yourself and stress test the assumptions behind both the bull and bear cases. A quick way to ground that view is to weigh the 4 key rewards and 2 important warning signs

Looking for more investment ideas?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.