1Wk
Nubank is a fantastic company, and as a Brazilian and customer, I can more than confirm that. However, the important question is: at what price should you buy its shares?
If you compare it to the large Brazilian banks, which have a credit portfolio vastly larger than Nubank, they are valued at a much more attractive price, for example: Banco do Brasil - P/E 3.9 / DY 10% / ROE 19.9% or Banco Itaú - P/E 6.8 / DY 7.2% / ROE 16.2%
If you compare it to the large Brazilian banks, which have a credit portfolio vastly larger than Nubank, they are valued at a much more attractive price, for example: Banco do Brasil - P/E 3.9 / DY 10% / ROE 19.9% or Banco Itaú - P/E 6.8 / DY 7.2% / ROE 16.2%
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•1Wk
@BamBamInvest Yep, I am. I agree with you that Nubank is a promising fintech. However, I believe there might be more attractive investment opportunities currently in the LA region.
With the Brazilian Central Bank likely to increase interest rates further next year, Nubank may face challenges in managing rising delinquency rates (evident over several quarters...going up and up). This could impact their profitability and growth trajectory.
On the other hand, there are established banks in the LA region, with more diversified and robust credit portfolios, are currently trading at significantly lower valuations, mainly attributed to interest rate hikes and the impact of currency fluctuations experienced in 2024.
With the Brazilian Central Bank likely to increase interest rates further next year, Nubank may face challenges in managing rising delinquency rates (evident over several quarters...going up and up). This could impact their profitability and growth trajectory.
On the other hand, there are established banks in the LA region, with more diversified and robust credit portfolios, are currently trading at significantly lower valuations, mainly attributed to interest rate hikes and the impact of currency fluctuations experienced in 2024.
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•@Faijon That's a good point, but I also believe that $NU 's loan portfolio is robust, they will survive if interest rates continue to rise and will then also benefit from falling interest rates. Moreover, rising interest rates are also an opportunity to poach more customers from the incumbents as they offer better conditions.
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