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The Zacks Consensus Estimate for earnings in the to-be-reported stands at 10 cents, indicating 11% sequential growth. The consensus estimate for revenues is pegged at $2.9 billion, indicating 6.1% sequential growth. There has been no change in analyst estimates or revisions lately.
Image Source: Zacks Investment Research
The company has an impressive earnings surprise history. Earnings surpassed the Zacks Consensus Estimate in two of the trailing four quarters, matched once and missed once, with an average earnings surprise of 13.9%.
Image Source: Zacks Investment Research
Q2 Earnings Beat Seems Unlikely
Our proven model doesn’t conclusively predict an earnings beat for NU this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
We expect that the significant year-over-year improvement in the company’s top line in the to-be-reported quarter will be driven by strong customer growth. The Zacks Consensus Estimate for active customers is pegged at 85.5 million, suggesting 3.5% sequential growth. NU's low-cost operating platform and revenue strength are expected to impact the bottom line in the quarter positively.
The Stock Has Corrected
The stock has declined 7.2% in the past month compared with the 8.7% decline of the industry and the 6% fall in the Zacks S&P 500 composite.
One-Month Price Performance
Image Source: Zacks Investment Research
The performance of its closest competitors has not been impressive as well, with Banco Santander (Brasil) S.A. (BSBR - Free Report) barely moving and SoFi Technologies (SOFI - Free Report) gaining just 1% over the same period.
Looking beyond the one-month performance, NU’s stock has surged 20.3% over the past six months and 42.7% year to date, indicating that the current downturn is part of a correction phase.
NU is currently trading at a discount relative to its industry. If we look at the forward 12-month Price/Earnings ratio, NU shares currently trade at 21.95X forward earnings, significantly lower than the industry’s 33.42. Based on trailing 12-month EV-to-EBITDA, NU is currently trading at 21.62X, way below the industry’s 53.65X.
A Strong Business Model is Crucial for Investment
NU's success in Brazil, driven by a solid brand, efficient cost structure and improved monetization, is expanding into Latin America, including Mexico and Colombia. In the first quarter of 2024, revenues grew 69% year-over-year, and adjusted net income surged 143%, with a customer base increase of 5.5 million, reaching 99.3 million globally. The digitization trend supports further growth. Despite challenges like foreign exchange risks and competition, NU’s future is promising, with growth expected from geographic expansion in Argentina, Peru, Chile and Uruguay and enhancing services in current markets.
Grab NU This Earnings Season
NU, currently available at a discount relative to its industry, offers an attractive investment opportunity. With a robust business model, impressive growth potential in both revenues and profit and an expanding customer base, NU is well-positioned for continued success. The company's strategic initiatives and strong market presence make it a top pick for investors looking to gain exposure to the fintech sector this earnings season.
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Is Nu Holdings (NU) Stock a Smart Buy Before Q2 Earnings Report?
Nu Holdings Ltd. (NU - Free Report) will report its second-quarter 2024 results on Aug 13, after the bell.
The Zacks Consensus Estimate for earnings in the to-be-reported stands at 10 cents, indicating 11% sequential growth. The consensus estimate for revenues is pegged at $2.9 billion, indicating 6.1% sequential growth. There has been no change in analyst estimates or revisions lately.
The company has an impressive earnings surprise history. Earnings surpassed the Zacks Consensus Estimate in two of the trailing four quarters, matched once and missed once, with an average earnings surprise of 13.9%.
Q2 Earnings Beat Seems Unlikely
Our proven model doesn’t conclusively predict an earnings beat for NU this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
NU has an Earnings ESP of 0.00% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Customer Expansion Should be the Driver in Q2
We expect that the significant year-over-year improvement in the company’s top line in the to-be-reported quarter will be driven by strong customer growth. The Zacks Consensus Estimate for active customers is pegged at 85.5 million, suggesting 3.5% sequential growth. NU's low-cost operating platform and revenue strength are expected to impact the bottom line in the quarter positively.
The Stock Has Corrected
The stock has declined 7.2% in the past month compared with the 8.7% decline of the industry and the 6% fall in the Zacks S&P 500 composite.
One-Month Price Performance
The performance of its closest competitors has not been impressive as well, with Banco Santander (Brasil) S.A. (BSBR - Free Report) barely moving and SoFi Technologies (SOFI - Free Report) gaining just 1% over the same period.
Looking beyond the one-month performance, NU’s stock has surged 20.3% over the past six months and 42.7% year to date, indicating that the current downturn is part of a correction phase.
NU is currently trading at a discount relative to its industry. If we look at the forward 12-month Price/Earnings ratio, NU shares currently trade at 21.95X forward earnings, significantly lower than the industry’s 33.42. Based on trailing 12-month EV-to-EBITDA, NU is currently trading at 21.62X, way below the industry’s 53.65X.
A Strong Business Model is Crucial for Investment
NU's success in Brazil, driven by a solid brand, efficient cost structure and improved monetization, is expanding into Latin America, including Mexico and Colombia. In the first quarter of 2024, revenues grew 69% year-over-year, and adjusted net income surged 143%, with a customer base increase of 5.5 million, reaching 99.3 million globally. The digitization trend supports further growth. Despite challenges like foreign exchange risks and competition, NU’s future is promising, with growth expected from geographic expansion in Argentina, Peru, Chile and Uruguay and enhancing services in current markets.
Grab NU This Earnings Season
NU, currently available at a discount relative to its industry, offers an attractive investment opportunity. With a robust business model, impressive growth potential in both revenues and profit and an expanding customer base, NU is well-positioned for continued success. The company's strategic initiatives and strong market presence make it a top pick for investors looking to gain exposure to the fintech sector this earnings season.