The withdrawals of the shares are stressful. You are bombarded with news titles about how the world ends, the markets are in restlessness and why now is the time to sell.
Usually reality is not as bad as titles suggest. From this writing we have entered the withdrawal of the stock market, and these titles begin to appear again. No one knows if this is the beginning of a new bear market or just a temporary withdrawal in the current bull market.
However, what I know is that smart investors do not run from pulling the stock market; They accept them. They are an opportunity to buy fast growing, high quality companies on cheap.
Nu holdings(Nyse: nu) – With 33%supplies- there is a potential purchase for investors who seek quickly growing financial technology.
The best way to analyze stocks during the market fall is not to zoom in daily prices, but zoom. Let’s try to figure out where stock nu Holdings could be in five years.
Nu Holdings is a home company Nubank, a digital bank that started in Brazil. With its elegant mobile interface and contains catering in the Brazilian market, the company quickly gained a market share and deronated existing players in the country. About 58% of the adult population of Brazil uses Nubank or about 100 million people. It is an incredible growth of a permanent start about 10 years ago.
Now the company is starting more and more to redeem its user base. Since 2020, a monthly income per active customer has increased 33% annual rate in the entire Nubank business. Combined with a consistent growth of users in Brazil, the market has exceeded $ 609 million in revenue to $ 9.5 billion within a few years. It is more than a tenfold increase in revenue in just a few years.
Brazil, however, is not where Nubank’s ambitions end. She has launched her banking platform in Mexico and Colombia, which they both see fast adoption. Mexican users surpassed 10 million in the last quarter; Colombia surpassed 2.5 million. With a combined population of about 180 million, these two countries still have a lot of run to run for Nubank.
The latest conference callThe administration said that the first 10 years of his business focused on winning the Brazilian market and proving that the product could function in other Latin American countries, such as Mexico and Colombia. Over the next 10 years, he wants to test this hypothesis in other countries in Central and South America.
This is a big market opportunity, including considerable countries such as Peru, Argentina and Chile – with a combined population of about 100 million – and many smaller but richer markets such as Uruguay and Costa Rica. In total, Latin America has a population of about 650 million.
Unlike Europe and East Asia, the population of the region should grow at least the next decade, if not longer. It provides a huge market opportunity for nu Holdings.
Given that this is a record, I have no doubt that Nu Holdings can increase its income over the next five years. It probably won’t be as fast as the last few years, but I don’t think it’s crazy about $ 11.5 billion revenue will triple to $ 35 billion at the time.
The good thing is that Nu Holdings has increased her earnings in recent years. A few years ago, the net revenue moved from negative to nearly $ 2 billion in 2024. As the company increases and gets more market share in Mexico and Colombia, I think its earnings can grow even faster than revenue, and I would not be surprised if the net income reaches 8 billion USD in five years.
Today, the Nu Holdings section has a market capitalization of about $ 50 billion. Its price ratio of price and earnings (P/e) At 2024. Earnings are 25, which does not look overly cheap. However, it does not earn what the company has earned in the past, but what will earn in the future.
If the job generates US $ 8 billion net revenue of five years, the section will be close to 6 on the basis of today’s market capitalization. I think the fast -growing Fintech deserves a trade with much higher multiple, which means that the stock nu Holdings should be higher by five years.
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