Key insights
- The author presents a bullish case for Nubank ($NU), highlighting strong Q1 '26 results, including revenue growth, ROE, and customer acquisition. Key catalysts include potential US market entry and product expansion. Concerns around increased expected credit losses are acknowledged but viewed as manageable. The author believes the market isn't fully pricing in the US opportunity, suggesting upside potential for the stock.
What more do you need to see before starting a position?
Q1 ‘26 was a monster quarter.
- Revenue up over 50% along with net income. First 5B rev quarter
- ROE impressively hits ~30%
- 135M customers
- Forward P/E down to ~22x
- PEG < 1
- playbook for Brazil seems to be working, Columbia positioned nicely after that
Outside of FX and international market risk, my only issue with Q1 is the 70%+ increase in expected credit losses, and obviously would like to see that under revenue growth - but is that not classic growing pains?
What doesn’t feel priced in at all is U.S market entry. With conditional OCC approval occurring earlier in January, the pathway for entry could be within 2 years, no? Plus there will be millions of Hispanic American customers to serve immediately.
I understood the product mix is less expansive as compared to fintech’s others love, like SoFi - but what value do you place on NU’s opportunity to put any new product mix in front of 135M customers instantly? They are certainly planning on product expansion to provide more product mixes to their incredibly loyal (to me a cultural moat) customer base.
Regulatory moat is forming, cultural moat is strong, and capital efficiency is best in class.