Here's Why Nu Holdings Ltd. (NU) Fell More Than Broader Market

Nu Holdings Ltd. (NU) closed the most recent trading day at $13.97, moving -1.96% from the previous trading session. The stock fell short of the S&P 500, which registered a loss of 1.36% for the day. Elsewhere, the Dow lost 1.64%, while the tech-heavy Nasdaq lost 1.46%.

The company's stock has dropped by 15.28% in the past month, falling short of the Finance sector's loss of 5.19% and the S&P 500's loss of 1.76%.

The investment community will be closely monitoring the performance of Nu Holdings Ltd. in its forthcoming earnings report. It is anticipated that the company will report an EPS of $0.2, marking a 66.67% rise compared to the same quarter of the previous year. In the meantime, our current consensus estimate forecasts the revenue to be $4.97 billion, indicating a 52.98% growth compared to the corresponding quarter of the prior year.

For the full year, the Zacks Consensus Estimates project earnings of $0.88 per share and a revenue of $21.18 billion, demonstrating changes of +41.94% and +34.27%, respectively, from the preceding year.

Any recent changes to analyst estimates for Nu Holdings Ltd. should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 1.45% increase. Nu Holdings Ltd. presently features a Zacks Rank of #2 (Buy).

In the context of valuation, Nu Holdings Ltd. is at present trading with a Forward P/E ratio of 16.29. For comparison, its industry has an average Forward P/E of 10.8, which means Nu Holdings Ltd. is trading at a premium to the group.

It is also worth noting that NU currently has a PEG ratio of 0.56. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. As the market closed yesterday, the Banks - Foreign industry was having an average PEG ratio of 0.76.

The Banks - Foreign industry is part of the Finance sector. At present, this industry carries a Zacks Industry Rank of 40, placing it within the top 17% of over 250 industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

Research Chief Names "Single Best Pick to Double"

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.

Free: See Our Top Stock And 4 Runners Up

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Nu Holdings Ltd. (NU): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research