Nu Holdings (NYSE:NU) is back in focus after reporting strong revenue growth, faster rising earnings per share, and higher revenue per active customer, a combination that is sharpening interest in the stock.

The latest 5.7% 1 day share price gain to $13.17 comes after a year where Nu Holdings' 3 year total shareholder return of 66.92% contrasts with a more mixed recent pattern of a 22.62% year to date share price decline and slightly negative 1 year total shareholder return of 0.60%. This suggests momentum has cooled even as the market reassesses growth potential and credit risk following the new share buyback and rating changes.

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So with Nu Holdings growing revenue, lifting earnings and generating more per active customer, yet trading at an 18% discount to one intrinsic estimate and 35% below analyst targets, is this a genuine opportunity or is future growth already priced in?

Most Popular Narrative: 42.1% Undervalued

The most followed narrative on Nu Holdings points to a fair value of $22.74 per share, well above the last close at $13.17, which is a sizeable gap that rests on specific growth, profitability, and expansion assumptions.

The long-term vision, which CEO David Vélez refers to as the company’s “Act III,” is built around three pillars: deepening monetization in Brazil through high-margin products such as mortgages, private banking, and SME services in order to increase ARPAC from $16 to above $25; replicating the model in Mexico and Colombia until full profitability is reached; and preparing for expansion into the United States by leveraging the know-how accumulated across Latin America. At the same time, the planned investment of 45 billion Brazilian reais during 2026 (approximately $8.2 billion) signals an aggressive reinvestment commitment in AI, infrastructure, and segment expansion. In Vélez’s own words, 2026 is the transition year from a regional bank into a global financial platform.

Want to see how this “Act III” vision turns into numbers for Nu Holdings? The fair value hinges on ambitious revenue growth, rising margins, and a richer product mix per customer. Curious which assumptions really carry the model and how expansion outside Brazil feeds into that $22.74 figure? The full narrative lays out those levers in detail.

Result: Fair Value of $22.74 (UNDERVALUED)

However, Nu Holdings' heavy exposure to Brazil and the recent uptick in credit loss provisions mean that a tougher credit cycle or a weaker real could quickly challenge this undervalued narrative.

Another View: What Nu Holdings’ P/E Says About Value

While Nu Holdings screens as undervalued on some intrinsic estimates, its current P/E of 20.1x sits above both the US Banks industry at 12.3x and a peer average of 16.7x, and even above a fair ratio of 17.7x. That richer multiple can mean less room for error if growth or credit quality disappoints.

For investors weighing this against the earlier fair value work, the key question is simple: Is Nu Holdings priced for its banking peers, or for something closer to a high growth platform? Which scenario feels closer to your own expectations for earnings and risk?

Next Steps

If the mixed signals around Nu Holdings leave you undecided, use that hesitation as a cue to review the full picture of data, risks, and upside potential and weigh it against your own tolerance for volatility through 3 key rewards and 1 important warning sign

Looking for more investment ideas beyond Nu Holdings?

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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.