Why Nu Holdings Ltd. (NU) Dipped More Than Broader Market Today

Zacks
01-17

In the latest trading session, Nu Holdings Ltd. (NU) closed at $11.28, marking a -1.14% move from the previous day. The stock fell short of the S&P 500, which registered a loss of 0.21% for the day. Elsewhere, the Dow saw a downswing of 0.16%, while the tech-heavy Nasdaq depreciated by 0.89%.

Prior to today's trading, shares of the company had gained 9.71% over the past month. This has outpaced the Finance sector's loss of 0.91% and the S&P 500's loss of 1.56% in that time.

Market participants will be closely following the financial results of Nu Holdings Ltd. in its upcoming release. The company plans to announce its earnings on February 20, 2025. On that day, Nu Holdings Ltd. is projected to report earnings of $0.12 per share, which would represent year-over-year growth of 50%. Our most recent consensus estimate is calling for quarterly revenue of $3.3 billion, up 37.36% from the year-ago period.

Investors should also pay attention to any latest changes in analyst estimates for Nu Holdings Ltd. These latest adjustments often mirror the shifting dynamics of short-term business patterns. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Right now, Nu Holdings Ltd. possesses a Zacks Rank of #3 (Hold).

With respect to valuation, Nu Holdings Ltd. is currently being traded at a Forward P/E ratio of 19.5. This expresses a premium compared to the average Forward P/E of 8.75 of its industry.

Meanwhile, NU's PEG ratio is currently 0.41. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. As the market closed yesterday, the Banks - Foreign industry was having an average PEG ratio of 0.98.

The Banks - Foreign industry is part of the Finance sector. This group has a Zacks Industry Rank of 165, putting it in the bottom 35% of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.

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