Quick Read
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Nu Holdings (NU) commands 4 strong buys and 15 buys from Wall Street analysts with undervalued ratios despite generating 30.1% return on equity.
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Nubank’s valuation has compressed despite hitting $5B in quarterly revenue for the first time, though management attributes this to seasonality and mix rather than fundamental asset quality deterioration. Risk is there, but the upside narrative is just as real.
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Stocks trading under $20 often get dismissed as lottery tickets, but every so often a genuine compounder slips into that bucket because sentiment has cracked while fundamentals remain intact. Right now, one fintech that formerly counted Berkshire Hathaway (NYSE:BRK.B) as a holder is sitting roughly 30% below its highs, and the pullback looks more like an opportunity than a verdict on the business.
With that in mind, here is one stock trading under $20 that analysts believe has serious upside potential.
Nu Holdings (NYSE: NU)
Nu Holdings (NYSE:NU), the parent company behind Nubank, is the digital banking platform that has systematically disrupted incumbent banks across Brazil, Mexico, and Colombia.
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Shares closed the most recent session at $13.16, which puts the stock comfortably inside our $20 ceiling and well below the 52-week high of $18.98. For a retail investor, that is the kind of entry price that makes it easy to build a position without overcommitting, especially in a name that has scaled from a Brazilian credit card startup into a banking franchise with more than 135 million customers.
Nubank just put up its first $5 billion revenue quarter in company history, with net income climbing to $871 million, up 41% year over year on an FX-neutral basis, and net income has been compounding at more than 80% annually since 2022. The credit portfolio reached $37.2 billion, up 40% year over year FX-neutral, while deposits hit $42.4 billion. Wall Street is on board: 4 strong buys, 15 buys, and just 2 holds, with an average price target of $19.43, implying meaningful upside from current levels.
Nubank trades at a forward P/E near 18 with a PEG ratio of 0.753, which is unusually cheap for a bank growing this fast and generating a return on equity of 30.1%. CEO David Vélez framed the runway bluntly on the earnings call, noting that even after years of share gains, “it’s still day one for Nubank in Brazil” with only roughly 7% of a $100 billion-plus profit pool captured. Mexico, where the customer base has grown from 2 million to 15 million in four years, just hit its first quarter of IFRS profitability. Layer on the conditional OCC approval in January 2026 for a U.S. national bank charter, and the optionality starts to look enormous.
