Nu Holdings is experiencing a new milestone in America.

Nu Holdings Attracts Attention with Growth Strategies

Nu Holdings (NYSE:NU) has made headlines by applying for a national bank charter in the U.S. and focusing on the American market for the first time. Additionally, thanks to a new partnership with Amazon, NuPay will be added as a payment option on Amazon Brazil.

Nu Holdings has gained significant momentum with a stock price increase of 49.3% since the beginning of the year, recently reaching record levels. This is a clear indication that investors are excited about the company's expansion efforts and strong operational performance. Over the long term, a 3-year total shareholder return of 257.4% highlights how dramatically the company has grown since its inception.

With shares at an all-time high and an optimistic atmosphere prevailing, the critical question for investors is whether Nu Holdings is still undervalued in light of its bold growth plans or if its future successes have already been fully priced in.

The popular narrative suggests that Nu Holdings's current fair value is set at $17.46. This figure is above the stock's last closing price of $15.87. Analysts see room for the stock to rise further.

The acceleration of the transition from cash to digital payments and online banking continues to boost Nu Holdings' transaction volumes in historically underserved markets and supports strong net margin expansion as digital penetration deepens by creating cross-selling opportunities.

Key factors supporting Nu Holdings' bright price target include high growth expectations and bold profit forecasts. However, intense competition from fintechs and increased exposure to riskier credit segments could quickly threaten Nu Holdings' optimistic growth outlook.

From a different perspective, Nu Holdings' current P/E ratio is 33.3 times. This ratio is high compared to both the U.S. banking industry average of 11.1 times and its competitors at 11.4 times. While the reasonable ratio that the market could potentially justify is only 21.7 times, it appears the market is anticipating a challenging scenario as it prices the future. Does this premium signal long-term conviction, or should investors be preparing for a pullback?

With analysis-driven insights regarding Nu Holdings, explore two major rewards and one critical warning sign that could influence your investment decisions.