Nu Holdings Keeps Imploding: Goldman Sachs Rieterated Its Belief That NU Shares are Going to Double
Goldman Sachs sees Nu Holdings doubling from here, yet the stock keeps sliding even as profits hit record highs. Understanding what separates those two realities could define whether this is the buying opportunity of the year or a value trap…
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Nu Holdings (NYSE:NU | NU Price Prediction) currently trades at $12.23. The average price target on Wall Street is $18.69, which means 52.8% upside.
Nu runs Nubank, a digital bank with 139 million customers across Brazil, Mexico and Colombia. It recently posted its first quarter with “more than $1 billion in net income”. Goldman Sachs analyst Tito Labarta repeated his Buy rating and a Street-high $23.00 target, means 88% upside.
The stock keeps falling while profits grow. Shares sit 35.6% below their 52-week high of $18.98.
Record Profits Could Not Stop a 35% Slide From the Highs
Weaker credit quality is the main cause. Overdue credit card receivables rose to 12.5% from 11.0%. Stage 3 loan exposures rose to 8.3% from 6.2%. Loans more than 90 days past due rose 35 basis points to 6.9%. The CET1 capital ratio fell to 11.9% from 13.0%.
Taxes add pressure. Nu’s effective combined Brazilian tax rate is 42.5%. Starting next year, new consumption taxes on financial services begin at about 10.85% and rise to 12.50% by 2033.
The latest leg down was sharp. Nu fell 10.04% in a single session and 13.02% over the week, while the S&P 500 slipped 1.03%.
Goldman’s $23 Case Rests on a 30% ROE, Higher ARPAC and Mexico
Labarta’s thesis rests on three pillars: Nu keeps a return on equity above 30% with low customer acquisition costs; ARPAC (average revenue per active customer) rises as existing customers add products; and market share gains in Mexico and Colombia extend earnings growth.
Results support that case. ROE hit 33% and ARPAC reached $17. The CEO noted: “We’ve gone from 13 to 17. A lot of the incumbent banks, if you look at the ARPAC, they are 40 to 45.” Mexico has a full banking license and more than 16 million customers, with ARPAC of $12.3 versus $5.6 in Brazil at a similar stage.
Risk-adjusted net interest margin hit a record 12.4%. The CFO called that “sustainable” but noted he never described 12% as a floor. Management expects payroll lending to reach scale in 18 to 24 months and U.S. credit models in 12 to 30 months.
18 of 22 analysts rate Nu a Buy, 3 a Hold, and 1 a Strong Sell. Goldman’s update was a repeat.
Latin American Fintech Is Falling, and Nu Is Falling Fastest
The fintech group has sold off, but Nu’s recent drop is steepest.
MercadoLibre (NASDAQ:MELI) trades at $1,712.41, down 12.91% over the past month. Its $2272.28 target means 32.7% upside, with 19 of 24 analysts rating it a Buy.
StoneCo (NASDAQ:STNE) trades at $9.27, down 24.35% year to date. Its $14.41 target means 55.4% upside, but only 9 of 17 analysts rate it a Buy.
StoneCo has the largest consensus upside but weaker Buy support. Nu offers similar upside with stronger confidence. Goldman’s $23 target is the most aggressive in the group.
Nu Trails the S&P 500 by 39 Points This Year
At $12.23, Nu trades well below the $18.69 consensus target from 22 analysts, a 52.8% gap. Year to date, the stock is down 26.94%, while the S&P 500 is up 12.26%. Over the past month, Nu lost 14.48% while the index dipped 0.49%.
Nu trades at 15x forward earnings. Management has used about $500 million of its $1.0 billion buyback.
- Strong Buy: 5
- Buy: 13
- Hold: 3
- Strong Sell: 1
Credit Trends Will Decide Whether Goldman’s Double Happens
The bull scenario requires delinquencies to stabilize and risk-adjusted margins to hold near 12% while Mexico grows under its new license. The bear scenario involves Stage 3 loans continuing to rise and new Brazilian taxes cutting earnings faster than ARPAC growth can offset.
The bull case requires Nu to prove recent credit weakness is seasonal and its AI underwriting can handle Brazil’s downturn. The bear case is that falling capital ratios and rising taxes squeeze a lender expanding into riskier borrowers.
My position is bullish. A 33% ROE at 15x forward earnings leaves room for error. Goldman’s $23 stands as a best-case target, with $18.69 as more realistic.
Contact [email protected] for any questions or corrections.
Alex Sirois is a financial writer with experience spanning both retail and institutional investing. He has written for InvestorPlace and held roles at BNY Mellon and Bernstein, giving him a perspective that bridges Main Street portfolios and Wall Street analysis.
Alex holds an MBA from George Washington University and has built his career across multiple industries, including e-commerce, education, and translation — a breadth of experience that informs how he breaks down complex financial topics for everyday investors. His writing is conversational, actionable, and grounded in long-term, buy-and-hold investing principles.
At 247 Wall St., Alex focuses on delivering analysis that is both accessible and useful, with a clear emphasis on helping readers make more informed decisions with their money.
