Why Nu Holdings Stock Soared 21% in April

Jennifer Saibil, The Motley Fool

Mon, May 5, 2025, 2:03 AM 3 min read

• Nu is growing fast and generating increasing profits.

• As a non-U.S. company, investors are flocking to it as they fear the impact of tariffs.

• Nu recently filed for approval for its Mexican bank charter.

Nu Holdings (NYSE: NU) stock jumped 21% in April, according to data from S&P Global Market Intelligence. It has been reporting strong growth consistently, and as a non-U.S.-based company, investors are seeing value in it while they're worried about tariffs. It also got a boost when it was approved to operate a bank in Mexico.

Nu is an all-digital bank operating out of Brazil that also serves Mexico and Colombia. It consistently reports double-digit revenue growth and increasing profit, and it's attracting new members to its platform at a rapid pace.

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Although its original mission was to offer banking and financial services for the mass consumers who couldn't break through the Brazilian banking system's high barriers to entry, it has expanded to offering a wide range of services and targeting all kinds of demographics. It's making strides in drawing in more of an upmarket population, and its cross-selling strategy is leading to higher engagement rates and average revenue per active user.

Despite its excellent performance, the market has been getting nervous about Nu stock as inflation says stubbornly high in Brazil, along with interest rates. But as a non-U.S. company, it's been getting some newfound love from the market in the wake of President Trump's new tariffs.

On the heels of Liberation Day, it got some even more exciting news. It had applied for a full bank charter to operate in Mexico and recently got approval. Until now, it was operating as a Popular Financial Company, or Sofipo, which is a common designation in Mexico that allows for certain financial services. Nu entered Mexico in 2019 and launched its first product in the region, a no-fee credit card, in 2020. It launched a high-interest rate savings account, Cuenta Nu, in 2023, and had a million signups within one month. It ended 2024 with more than 10 million customers, a 91% increase from 2023.

There's no question that this is excellent news for Nu and its shareholders, and it's just another step on a journey that has a long growth runway.

With its high growth and opportunity, a P/E ratio of 31 looks very attractive. However, as a bank stock, that could appear expensive. Investors need to understand how Nu is different from a typical bank stock and growing much more rapidly. This is also well below its P/E ratio over the past year.