Brazil-based digital bank Nu Holdings (NU) met earnings expectations for the third quarter late Wednesday. Nu stock, owned by Warren Buffett, fell in after-hours trading.
Nu Earnings Nearly Double, Sales Jump
For Q3, Nu reported record revenue of $2.94 billion, jumping 38% vs. a year ago and beating FactSet estimates for around $2.6 billion. However, revenue growth slowed from a 52% gain in the prior second quarter.
Nio reported Q3 earnings of 11 cents per share, in line with views, and nearly doubling from six cents a year ago.
The company added 5.2 million customers during the quarter. Gross margin expanded to 46% from 43% and net interest income increased by 63%, Nu said.
Going into the Q3 report, analysts were projecting full-year earnings per share of 42 cents, a 75% increase from 2023.
Nu Stock Pops In Extended Trading
The digital bank stock wobbled in late trade, most recently down just more than 1%.
Nu stock fell 1.3% in Wednesday’s regular stock market action, near the top of the buy range from a late-October breakout. On Tuesday, Nu stock hit a fresh post-IPO high.
Ahead of the Q3 report, Nu stock cleared a 15.16 buy point from a six-week, first-stage flat base on Oct. 28, according to MarketSurge pattern recognition. The base rides neatly on support at the chart’s 50-day/10-week moving average.
The relative strength line for Nu stock shows an uptrend. It would be a positive sign to see that strength indicator reach new high ground along with Nu’s shares. A rising RS line means that a stock is outperforming the S&P 500 index.
IBD named Nu as Stock Of The Day on Oct. 28.
Warren Buffett, Cathie Wood Own Brazilian Fintech
The upstart Brazilian fintech bank touts itself as the fourth-largest Latin American bank by number of customers, 109.7 million reported at the end of Q3.
Nu Holdings says it uses data and technology to transform banking and empower people. The company serves more than 100 million customers across Brazil, Mexico and Colombia.
Reuters reported Nov. 7 that Brazil’s central bank has been raising interest rates at an accelerated pace, amid high inflation. Higher rates generally boost net interest income.
Nu, a fast-growing digital bank, saw wild swings after its U.S. initial public offering in December 2021. But it has delivered positive earnings every quarter since the third quarter of 2022, according to FactSet.
Both Warren Buffett and Cathie Wood own Nu stock, though they are very different types of investors. The fintech is a top-10 holding in Buffett’s equity portfolio. Wood also owns MercadoLibre (MELI), a Latin American online retail play.
Year to date, Nu stock has jumped 88% to a post-IPO high.
Last week, MercadoLibre (MELI) plunged amid earnings, undercutting the 50-day line. The Latin American e-commerce and payments giant rebounded somewhat since then and remains up 23% in 2024.
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