NU (NYSE:NU) Shares Gap Up – Time to Buy?

by · The Markets Daily

Shares of Nu Holdings Ltd. (NYSE:NU – Get Free Report) gapped up prior to trading on Thursday. The stock had previously closed at $12.66, but opened at $13.24. NU shares last traded at $13.0040, with a volume of 16,572,963 shares trading hands.

NU News Summary

Here are the key news stories impacting NU this week:

  • Positive Sentiment: Nu said it is not pursuing a transaction with Monzo, removing uncertainty created by recent media reports and signaling that the company remains focused on its existing growth strategy. Reuters article
  • Positive Sentiment: Investor interest was reinforced by unusually heavy call-option activity, with reported call volume well above its typical level. This may reflect bullish short-term positioning, although options activity is speculative and does not change the company’s fundamentals. Unusual call option buying article
  • Neutral Sentiment: Nu is receiving increased investor attention as analysts and market participants compare its profitable, scaled digital-banking model with peers such as Chime. Recent reported results showed quarterly revenue of $5.88 billion and earnings per share of $0.22, but the articles did not identify a new earnings or guidance catalyst. Zacks trending stock article
  • Neutral Sentiment: Commentary is focused on whether Nu can replicate its Brazilian success in the United States. U.S. expansion could provide a substantial long-term opportunity, but it also introduces competitive and execution risks. Nu’s U.S. expansion commentary

Analysts Set New Price Targets

A number of equities research analysts recently commented on NU shares. JPMorgan Chase & Co. lifted their target price on NU from $18.00 to $20.00 and gave the stock an “overweight” rating in a report on Tuesday, July 7th. Susquehanna increased their price target on shares of NU from $13.00 to $16.00 and gave the stock a “neutral” rating in a report on Friday, August 14th. Rothschild & Co Redburn set a $19.00 price target on shares of NU in a research report on Monday. Weiss Ratings cut shares of NU from a “hold (c+)” rating to a “hold (c)” rating in a research note on Friday, August 21st. Finally, UBS Group upped their price objective on shares of NU from $16.90 to $18.20 and gave the company a “buy” rating in a report on Thursday, August 20th. Eight analysts have rated the stock with a Buy rating, five have given a Hold rating and one has assigned a Sell rating to the company’s stock. According to MarketBeat, the company currently has a consensus rating of “Moderate Buy” and a consensus target price of $18.02.

Check Out Our Latest Stock Report on NU

NU Price Performance

The firm has a market cap of $62.21 billion, a PE ratio of 17.26, a price-to-earnings-growth ratio of 0.50 and a beta of 0.94. The stock has a 50 day simple moving average of $14.31 and a two-hundred day simple moving average of $13.85. The company has a debt-to-equity ratio of 0.35, a quick ratio of 0.55 and a current ratio of 0.55.

NU (NYSE:NU – Get Free Report) last issued its earnings results on Tuesday, June 30th. The company reported $0.22 EPS for the quarter. The firm had revenue of $5.88 billion for the quarter. NU had a return on equity of 31.59% and a net margin of 18.65%. Sell-side analysts expect that Nu Holdings Ltd. will post 0.86 earnings per share for the current year.

NU declared that its Board of Directors has initiated a share buyback plan on Thursday, June 4th that authorizes the company to repurchase $0.00 in shares. This repurchase authorization authorizes the company to purchase shares of its stock through open market purchases. Shares repurchase plans are usually a sign that the company’s management believes its stock is undervalued.

Insider Activity at NU

In other news, CEO Cristina Junqueira sold 65,000 shares of NU stock in a transaction that occurred on Tuesday, August 25th. The shares were sold at an average price of $14.71, for a total transaction of $956,150.00. Following the completion of the transaction, the chief executive officer directly owned 2,542,083 shares of the company’s stock, valued at $37,394,040.93. The trade was a 2.49% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Henrique Camossa Sald Fragelli sold 221,707 shares of the business’s stock in a transaction on Friday, August 14th. The shares were sold at an average price of $15.81, for a total transaction of $3,505,187.67. Following the completion of the transaction, the insider owned 979,446 shares of the company’s stock, valued at approximately $15,485,041.26. This represents a 18.46% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. In the last 90 days, insiders sold 361,707 shares of company stock worth $5,626,338. Insiders own 1.20% of the company’s stock.

Institutional Trading of NU

Several hedge funds and other institutional investors have recently added to or reduced their stakes in the company. Bank of America Corp DE boosted its stake in shares of NU by 8.6% during the 1st quarter. Bank of America Corp DE now owns 45,966,932 shares of the company’s stock worth $660,545,000 after acquiring an additional 3,656,945 shares in the last quarter. Assenagon Asset Management S.A. grew its position in shares of NU by 17.9% during the 1st quarter. Assenagon Asset Management S.A. now owns 32,535,091 shares of the company’s stock valued at $467,529,000 after acquiring an additional 4,944,618 shares during the period. Arrowstreet Capital Limited Partnership increased its stake in shares of NU by 53.7% in the 4th quarter. Arrowstreet Capital Limited Partnership now owns 28,310,084 shares of the company’s stock valued at $473,911,000 after purchasing an additional 9,893,940 shares in the last quarter. Maverick Capital Ltd. increased its stake in shares of NU by 91.6% in the 1st quarter. Maverick Capital Ltd. now owns 22,444,311 shares of the company’s stock valued at $322,525,000 after purchasing an additional 10,729,747 shares in the last quarter. Finally, Squadra Investments Gestao DE Recursos LTDA. raised its holdings in NU by 266.8% in the 1st quarter. Squadra Investments Gestao DE Recursos LTDA. now owns 22,312,501 shares of the company’s stock worth $320,631,000 after purchasing an additional 16,229,515 shares during the period. Institutional investors and hedge funds own 84.02% of the company’s stock.

About NU

(Get Free Report)

Nu Holdings Ltd., operating under the Nubank brand, is a digital financial services company that provides banking and payment products primarily through mobile applications. The company offers digital accounts, credit cards, personal loans, payment services, investment products and insurance, serving consumers and small businesses.

Nubank was founded in 2013 by David Vélez, Cristina Junqueira and Edward Wible with the goal of expanding access to simpler, lower-cost financial services through technology.

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