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I bought my first shares of Nubank around $7 in late 2023. Since then I've watched it run to $15, fall back to $10 on tariff fears, bounce to an all-time high of $18.98 in January 2026, and pull back to $14 after the latest macro selloff. I've added at most of those dips. Here's why I still think this is one of the most underpriced compounders in the market — and where the real risk actually sits.
**Nubank grew 10X revenue in four years**
Nubank grew revenue from $1.7B in 2021 to $16.3B in FY2025. That's roughly a 10x in four years.
\- FY2022 came in around $4.8B (+182% YoY)
\- FY2023 at $7.7B (+60%)
\- FY2024 at $11.5B (+49%)
\- and FY2025 at $16.3B (+42%)
Yes, the rate is decelerating, but 42% revenue growth at $16B in revenue is exceptional at any scale in financial services. Net income hit $2.87B in FY2025, up 45% YoY, while operating expenses grew just 11%. Return on equity is running at 30% — higher than JPMorgan, Citi, or Bank of America. This is not a "we'll be profitable someday" story. They're printing cash.
**Revenue growth could stay about 30% for the next 2-3 years**
I believe revenue growth stays above 30% for the next 2-3 years. Here's the thesis.
1. **ARPAC is the hidden flywheel.** Average monthly revenue per active customer sits around $12. Mature cohorts, customers 4+ years on platform, generate $25-27/month. With 127M active customers, even a $5 ARPAC improvement across the base is $7.6B in annualized revenue without adding a single new user. The monetization story is still in early innings, particularly in Mexico and Colombia.
2. **The lending book and deposits signal a longer revenue runway.** Nubank's interest-earning portfolio expanded 62% YoY in Q1 2025. Deposits grew 54% over the same period. When the lending book and deposit base are compounding faster than current revenue, the income statement is a lagging indicator, not a leading one.
3. **Mexico and Colombia are pre-monetization.** Brazil accounts for \~90% of current revenue. Mexico has 13M+ customers — roughly 14% of Mexican adults — and just received a full banking license enabling deposit-taking and lending at scale. Colombia is at 4M customers and early-stage. Neither market is anywhere close to Brazilian monetization levels. A Mexico revenue ramp over the next 3-5 years following Brazil's early trajectory adds a second engine by 2028-2029.
4. **The US expansion is the wildcard nobody is pricing in.** In January 2026, Nubank received conditional OCC approval to form a federally chartered US national bank. Strategic hubs are planned in Miami, San Francisco, Palo Alto. Nubank cleared this regulatory hurdle from a position of strength, $783M in net income last quarter, no external capital needed.
The target customer is clear: the \~62M Hispanic adults in the US, of whom roughly 11% remain unbanked and 22% are underbanked. That's the same playbook Nubank ran in Brazil — target a population that legacy banks underserve, enter with no-fee products, win trust, then cross-sell up the product stack. The brand infrastructure is already being built. Nubank is the naming rights sponsor of Inter Miami's stadium, Nu Stadium, which gives them direct visibility into the exact demographic they're targeting. At full penetration, a US Hispanic customer base monetized at $30-40/month ARPAC represents a TAM north of $20B annually larger than Nubank's entire current revenue base.
**Valuation**
On valuation, at \~$14/share NU trades at roughly 24x trailing P/E and 16x forward P/E, at a \~$69B market cap. The 3-year historical average P/E is 70x. The current multiple is 68% below that average — while earnings grew 45% and revenue grew 42% in the same period. For comparison, Visa trades at 32x earnings on mid-single-digit revenue growth.
**Risks**
There are three risks I'm watching closely.
1. FX exposure. Around 90% of revenue is BRL denominated. A sustained dollar strengthening cycle compresses reported USD results even when the underlying business grows in local currency. This is the most legitimate bear argument and it's not going away.
2. Credit cycle. Brazil consumer debt is at all-time highs. If NPLs spike, the lending book could deteriorate faster than the multiple allows for. Credit performance is worth watching every quarter.
3. US execution risk. OCC approval is step one. Actually acquiring US customers profitably against Chase, SoFi, Chime, and Robinhood is a different challenge entirely. The Inter Miami partnership builds brand awareness, but conversion to active banking customers is completely unproven.
At \~$14 you're paying fair value for a company still in the middle innings of its growth. The ARPAC flywheel, the Mexico banking license, and a real US entry with regulatory clearance, none of this is reflected in a 24x P/E. I'll keep adding on weakness. A sub-$60B market cap would be a gift.
Curious if anyone else is building a position here, or if there's a bear case I'm underweighting?