Nu Holdings Ltd. Fundamental Analysis
Nu Holdings Ltd. (NU) shows strong financial fundamentals with a PE ratio of 18.28, profit margin of 18.15%, and ROE of 28.94%. The company generates $17.5B in annual revenue with strong year-over-year growth of 42.99%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 75.6/100 based on profitability, valuation, growth, and balance sheet metrics. The B grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze NU's fundamental strength across five key dimensions:
Efficiency Score
WeakNU struggles to generate sufficient returns from assets.
Valuation Score
ExcellentNU trades at attractive valuation levels.
Growth Score
ExcellentNU delivers strong and consistent growth momentum.
Financial Health Score
ModerateNU shows balanced financial health with some risks.
Profitability Score
ExcellentNU achieves industry-leading margins.
Key Financial Metrics
Is NU Expensive or Cheap?
P/E Ratio
NU trades at 18.28 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, NU's PEG of 0.41 indicates potential undervaluation.
Price to Book
The market values Nu Holdings Ltd. at 4.62 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 17.92 times EBITDA. This signals the market has high growth expectations.
How Well Does NU Make Money?
Net Profit Margin
For every $100 in sales, Nu Holdings Ltd. keeps $18.15 as profit after all expenses.
Operating Margin
Core operations generate 22.96 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $28.94 in profit for every $100 of shareholder equity.
ROA
Nu Holdings Ltd. generates $4.11 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Nu Holdings Ltd. generates limited operating cash flow of $1.20B, signaling weaker underlying cash strength.
Free Cash Flow
Nu Holdings Ltd. produces free cash flow of $1.20B, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $0.25 in free cash annually.
FCF Yield
NU converts 2.06% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
18.28
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.41
vs 25 benchmark
P/B Ratio
Price to book value ratio
4.62
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.31
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.25
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.83
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.29
vs 25 benchmark
ROA
Return on assets percentage
0.04
vs 25 benchmark
ROCE
Return on capital employed
0.25
vs 25 benchmark
How NU Stacks Against Its Sector Peers
| Metric | NU Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 18.28 | 19.38 | Neutral |
| ROE | 28.94% | 804.00% | Weak |
| Net Margin | 18.15% | -7623.00% (disorted) | Strong |
| Debt/Equity | 0.25 | 1.07 | Strong (Low Leverage) |
| Current Ratio | 0.83 | 609.22 | Weak Liquidity |
| ROA | 4.11% | -20946.00% (disorted) | Weak |
NU outperforms its industry in 2 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Nu Holdings Ltd.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
2533.39%
Industry Style: Value, Dividend, Cyclical
High GrowthEPS CAGR
1695.28%
Industry Style: Value, Dividend, Cyclical
High GrowthFCF CAGR
242.53%
Industry Style: Value, Dividend, Cyclical
High Growth