Nu Holdings' upcoming earnings look unlikely to be well received if the market does not reward Inter & Co's results, since the two have historically traded similarly around earnings. Both operate in the same credit cycle, but Nu has a much lower share of secured lending, putting it at a credit-risk disadvantage, though it is more diversified across countries. x.com 

Inter & Co's newer cohorts do not mature at the same rates as older ones despite higher starting ARPACs, putting it at risk of serious trouble in the next credit cycle. Its leverage is much higher than Nubank's, yet its risk-adjusted returns are 5-6% against Nubank's 10-12%. Inter's ROE is below the 16%+ cost of capital for Brazilian fintech banks, leaving it unclear whether it can earn above that hurdle over time. x.com 

The market is not bullish enough on Brazilian digital banks Nu and Inter & Co, which grow fast despite high rates and could do far better if rates fall. Nu grows 40% a year and Inter 25% with Brazil's Selic at 13.75%, near its highest since 2020, yet they trade at 12x and 8x 2027 earnings, and Inter at 1.5x tangible book even after a 20% jump. Nu already earns a 30% ROE and Inter 16% and climbing; a return toward the 7.25% 30-year average rate would lift both growth and returns. x.com 

Nu is going global with best-in-class management, and buying Monzo could be a big growth opportunity. Per @PaulBonnet, Nubank is rumored to buy Monzo for about $13B. Monzo's loans are only 9-10% of deposits versus 85-90% at Nu, and its net margin is half Nu's, so Nu could likely grow Monzo's EPS at least 50% faster than its core. Nu trades under 4x revenue and would pay just under 6x for Monzo. The deal would be dilutive, likely 30% cash and 70% stock, but expands Nu's market. x.com  x.com  x.com  … Show more

Nu Holdings remains too cheap at about 13x forward earnings, worth buying more. Per @TheRayMyers, over two years customers rose from 105M to 139M, ARPU from $11 to $17 and net income from $1.5B to $3.6B, while the share price slipped from $14 to $13. x.com 

Inter & Co looks very cheap at 1.2x book and 5.5x 2027 earnings, with a 16% ROE and growth of about 20-25% a year. The multiple is depressed because it is a small-cap Brazilian bank with hit-or-miss English-language investor relations and some Brazilian consumer stress heading into a presidential election. Compared with Nu, it carries more execution and single-market risk but a lot more upside if it works and gets re-rated. x.com  x.com  x.com  x.com 

Nu Holdings trades at only 12x forward earnings despite strong growth, expanding profitability and operating leverage across its businesses and products. It costs under $1 to serve a customer, with no branches, paperwork or hidden fees; it reached 130+ million customers in eleven years and runs a 20% efficiency ratio versus 55% for the average bank. Per @JonahLupton, Q2 revenue rose 50% and net income 67%; he puts it near 11.2x next-twelve-month EPS with fair value of $24-28 per share. x.com  … Show more

Nu Holdings is a buy today because it shows operating leverage. Since 2020, monthly revenue per active customer has risen 382%, from $3.30 to $15.90, while the cost to serve each customer fell from $1.10 to $1.00: more revenue at lower cost. x.com  x.com 

Inter & Co looks practically free near its book value, offering huge upside with assets worth as much as the whole company. Shares trade just 40 cents above $4.69 book value per share. The rise in nonperforming loans from about 4.6% to 5% is not a sign of doom but a choice to enter payroll lending, where the loan book grew 12-fold to $2.5B; those loans carry higher default rates but much higher profitability. x.com  x.com  x.com 

Nu Holdings has a structural cost advantage from its mobile-first, branchless model, which strips out traditional banks' complexity and high fees, and its valuation offers a good margin of safety. It also adds South American diversification and exposure to a disruptive model. The case assumes a terminal P/E of 16 and 18% annual EPS growth, though it is a quite sensitive business that calls for care. x.com