Nu Holdings A

Nu Holdings A

NU

$ 15.46

$0.53 3.51% 0%

IBD Stock Analysis

• Flat base has 15.16 entry, support at 10-week moving average.

Composite Rating

98/99

Industry Group Ranking

34/197

Emerging Pattern

Flat Base

Flat Base

One of three positive chart patterns to look for when doing technical analysis. It usually occurs after a stock has advanced off of a “cup with handle” or “double bottom” pattern. The “flat base” moves straight sideways in a fairly tight price range for at least five weeks and does not correct more than 15%.

* Not real-time data. All data shown was captured at 2:39PM EDT on 10/28/2024.

Nu Holdings (NU) is the IBD Stock Of The Day as the Brazilian digital banking upstart delivers rapid and profitable growth. Nu stock flashed a bullish signal on Monday as it broke out to a post-IPO high.

Founded in 2016, Nu Holdings says it uses data and technology to transform banking and empower people. It serves more than 105 million customers across Brazil, Mexico and Colombia.

Nu Stock Breaks Out

Shares of Nu Holdings popped 3.6% on the stock market today. That gain bumped Nu stock above a 15.16 buy point from a six-week, first-stage flat base, according to MarketSurge pattern recognition. The base rides neatly on support at the chart's 50-day/10-week moving average. Earnings are set for Nov. 13.

The relative strength line for Nu stock hit a new high as the stock broke out, a positive sign. That is marked by a blue circle at the end of the RS line on the weekly MarketSurge chart. A rising RS line means that a stock is outperforming the S&P 500 index.

Latin American peer MercadoLibre (MELI), an online retail play, also advanced within a buy range. The IBD 50 and Leaderboard stock's buy range runs to 2,121. Earnings are due Nov. 6.

The Global X MSCI Argentina ETF (ARGT) is on SwingTrader. Shares hit a new high on Monday.

Besides Nu Holdings, Affirm (AFRM) and KKR (KKR) are among financial stocks currently on the IBD 50 list of top growth stocks. Generally solid earnings have boosted the sector.

Rapid Earnings, Revenue Growth For Nu Stock

The IBD Stock Checkup tool shows that Nu is currently the No. 1 stock in the foreign bank industry group, in terms of its IBD Composite Rating.

Nu stock earns a stellar Composite Rating of 98, an RS Rating of 93 and an EPS Rating of 81, all out of a best-possible 99. The EPS score is held back by a relatively short earnings history.

The fast-growing digital bank saw some wild swings after its initial public offering in December 2021. But it has delivered positive earnings every quarter since Q3 2022, according to FactSet.

In August, Nu reported that it earned 10 cents per share in the second quarter on sales of $2.85 billion. Year over year, Nu earnings doubled and revenue jumped 52.5%. Over the last three quarters, Nu's earnings growth averaged 161%, according to the Stock Checkup tool.

Analysts project that the company's earnings will surge 74% to 42 cents per share for the full year, rising a further 43% in 2025. Sales are seen rising a 29% in 2024 and 31% in 2025, though below the more robust 67% pace in 2023.

A Cathie Wood And Warren Buffett Pick

Both Warren Buffett and Cathie Wood own Nu stock, though they are very different types of investors.

Year to date, Nu stock has jumped 87% to a post-IPO high. That rally could limit upside potential from the latest breakout.

FactSet shows that 10 of the 21 analysts covering Nu stock rate it a sell or a hold. They have, on average, a price target of 14.56, below where shares were trading on Monday.

Please follow Aparna Narayanan on X @IBD_Aparna for more coverage.

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