NU (NYSE:NU) Shares Gap Up - Here's Why

Key Points

• NU shares jumped: The stock opened at $12.36, up from its prior close of $11.83, and later traded at $12.697.
• Quarterly results were mixed: Revenue of $6.26 billion exceeded estimates of $5.96 billion, while EPS of $0.22 fell one cent short of consensus but rose from $0.16 a year earlier.
• Analyst sentiment remains positive: NU has a “Moderate Buy” consensus rating and an average price target of $18.25; Needham reiterated its Buy rating with a $19 target.

Nu Holdings Ltd. (NYSE:NU - Get Free Report) gapped up prior to trading on Friday. The stock had previously closed at $11.83, but opened at $12.36. NU shares last traded at $12.6970, with a volume of 19,609,810 shares traded.

NU News Roundup

These are some of the NU news items that stood out recently:

• Positive Sentiment: Third-quarter revenue was $6.26 billion, above the $5.96 billion consensus, while EPS rose to $0.22 from $0.16 a year earlier. Coverage also highlighted the company’s global expansion plans. Nu Holdings Q3 revenue beats as it embarks on global expansion
• Positive Sentiment: Needham reaffirmed its Buy rating and set a $19 price target, implying substantial upside from the referenced $11.85 price. Needham & Company recommendations
• Negative Sentiment: EPS of $0.22 was a penny below the $0.23 consensus cited in the earnings report, a modest earnings-quality concern despite the revenue beat. Nu Holdings earnings report

Wall Street Analyst Weigh In

A number of brokerages recently weighed in on NU. Wolfe Research reduced their target price on shares of NU from $18.00 to $17.00 and set an "outperform" rating for the company in a report on Tuesday, August 25th. Needham & Company LLC reaffirmed a "buy" rating and issued a $19.00 price target on shares of NU in a report on Friday. Susquehanna increased their price objective on NU from $13.00 to $16.00 and gave the company a "neutral" rating in a research report on Friday, August 14th. Monness Crespi & Hardt began coverage on NU in a research report on Monday, October 26th. They set a "buy" rating and a $20.00 price objective for the company. Finally, JPMorgan Chase & Co. raised their price objective on NU from $20.00 to $23.00 and gave the stock an "overweight" rating in a research note on Tuesday, October 6th. Ten analysts have rated the stock with a Buy rating, five have assigned a Hold rating and one has assigned a Sell rating to the company. According to MarketBeat, the company has a consensus rating of "Moderate Buy" and an average target price of $18.25.

NU Trading Up 9.4%

The company has a fifty day simple moving average of $13.81 and a 200-day simple moving average of $14.25. The company has a current ratio of 0.55, a quick ratio of 0.55 and a debt-to-equity ratio of 0.35. The stock has a market cap of $62.86 billion, a price-to-earnings ratio of 17.47, a P/E/G ratio of 0.51 and a beta of 0.97.

NU (NYSE:NU - Get Free Report) last posted its quarterly earnings data on Thursday, November 12th. The company reported $0.22 EPS for the quarter, missing analysts' consensus estimates of $0.23 by ($0.01). NU had a net margin of 18.65% and a return on equity of 31.59%. The firm had revenue of $6.26 billion for the quarter, compared to analysts' expectations of $5.96 billion. During the same period in the prior year, the company posted $0.16 earnings per share. On average, research analysts forecast that Nu Holdings Ltd. will post 0.85 earnings per share for the current fiscal year.

Insider Activity

In other news, CEO Cristina Junqueira sold 25,000 shares of the business's stock in a transaction that occurred on Monday, October 5th. The shares were sold at an average price of $15.01, for a total transaction of $375,250.00. Following the sale, the chief executive officer owned 4,877,593 shares in the company, valued at $73,212,670.93. The trade was a 0.51% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 115,000 shares of company stock worth $1,706,400 in the last quarter. 1.20% of the stock is owned by insiders.

Hedge Funds Weigh In On NU

Several institutional investors and hedge funds have recently added to or reduced their stakes in NU. Dimensional Fund Advisors LP grew its holdings in shares of NU by 990.3% during the first quarter. Dimensional Fund Advisors LP now owns 298,789 shares of the company's stock valued at $4,294,000 after buying an additional 271,385 shares in the last quarter. Handelsbanken Fonder AB raised its position in NU by 5.6% during the second quarter. Handelsbanken Fonder AB now owns 2,770,572 shares of the company's stock valued at $37,015,000 after buying an additional 146,764 shares during the period. C WorldWide Group Holding A S raised its position in NU by 1,188.4% during the second quarter. C WorldWide Group Holding A S now owns 4,973,457 shares of the company's stock valued at $66,445,000 after buying an additional 4,587,432 shares during the period. Groupe la Francaise lifted its stake in NU by 50.2% in the 2nd quarter. Groupe la Francaise now owns 872,703 shares of the company's stock worth $11,670,000 after acquiring an additional 291,553 shares in the last quarter. Finally, Assenagon Asset Management S.A. lifted its stake in NU by 127.0% in the 3rd quarter. Assenagon Asset Management S.A. now owns 38,263,897 shares of the company's stock worth $484,421,000 after acquiring an additional 21,405,374 shares in the last quarter. 84.02% of the stock is currently owned by hedge funds and other institutional investors.

About NU

Nu Holdings Ltd., which operates under the Nubank brand, is a digital financial services company founded in Brazil in 2013. It provides banking and related services through mobile apps and other digital channels, with a focus on simplifying access to financial products. Its offerings include digital accounts, payment cards, credit products, personal loans, and investment services. The company also provides services to small businesses, with products and availability varying by country. Nu serves customers in Brazil, Mexico, and Colombia.

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