Nu Holdings Ltd. (NYSE: NU), the parent company of digital banking platform Nubank, saw its shares drop sharply Feb. 26, 2026, closing down 9.55% at $15.06 after reporting record fourth-quarter and full-year 2025 results that beat revenue expectations but failed to fully satisfy investor demands for clearer margin signals and cost trends.

The CEO of Nubank, David Vélez, representing the company in
The CEO of Nubank, David Vélez, representing the company in 2023

The decline came despite robust growth metrics: Q4 revenue reached $4.86 billion to $4.9 billion (varying slightly across reports), up about 45% to 62.5% year-over-year, surpassing analyst estimates around $4.55 billion. Net income hit a record $895 million, a 50% to 62% increase, driving return on equity to 33%. The company added 17 million customers in the quarter, ending 2025 with 131 million users—an 83% activity rate—and covered 62% of Brazil's adult population.

Full-year revenue climbed significantly, with gross profit at $1.96 billion in Q4 and efficiency ratio improving to 20%. Average revenue per active customer (ARPAC) rose to $15, up 27% year-over-year, reflecting higher monetization through credit, float and fee income.

Despite the positives, shares fell as investors digested credit-risk trends, operating leverage concerns and the absence of detailed forward guidance on profitability margins. Post-earnings, the stock traded in a range of $15.04 to $15.94, with high volume exceeding 60 million shares. After-hours trading showed further pressure, dipping to around $15.07.

CEO David Vélez called 2025 a "fantastic year," emphasizing disciplined growth, sustained profitability and investments in core markets. He highlighted Nubank's evolution into a multi-product, multi-country platform, with strong leadership in Brazil, Mexico and Colombia.

Management outlined 2026 priorities: solidifying dominance in Latin America, advancing Mexico's banking license, expanding SME and high-income segments, and preparing for global reach. A key milestone came in January 2026 with conditional OCC approval for a U.S. national bank charter, allowing Nu to launch Nubank, N.A., and focus on capitalization within 12 months. Executives also stressed embedding AI for operational efficiency and customer experience.

The company introduced a new Managerial P&L framework in Q4 to better reflect value creation, with full IFRS reconciliation and KPMG limited assurance.

Analysts largely maintained bullish views post-earnings. Consensus 12-month price targets range from $18.05 to $19.99, implying 20% to 33% upside from current levels, with highs up to $22 from firms like Susquehanna and Grupo Santander. Ratings skew toward Buy, citing robust credit metrics, underappreciated earnings power and expansion potential.

Some observers noted the sell-off as a classic "sell the news" reaction, with much of the growth already priced in after a strong 2025 run. Forward P/E sits around 19 to 23, reasonable given projected 31% revenue growth in 2026 and 44.6% earnings expansion in some estimates.

Nu's model—offering low-cost digital banking, credit cards, loans, investments and insurance—has disrupted traditional finance in underbanked Latin America. Deposits reached $41.9 billion, supporting scalable funding.

Challenges include macroeconomic volatility in key markets, competition from incumbents and fintech peers, and execution risks in U.S. entry. Yet asset quality remains solid, with disciplined risk management.

Market capitalization hovers around $78 billion to $80 billion. The stock's 52-week range spans $9.01 to $18.98, with recent peaks near $18.98 in late January 2026.

As Nu transitions from regional leader to potential global player, investors monitor customer additions, ARPAC trends and U.S. progress. The recent dip may offer entry for those betting on long-term disruption in digital finance.

With next earnings expected May 14, 2026, for Q1, focus stays on execution amid AI integration and international steps.