Is NerdWallet (NRDS) Still Undervalued Amidst Strong Earnings and Revenue Growth?

NerdWallet (NRDS) has emerged as a compelling case study in the fintech sector, balancing robust revenue growth with mixed earnings performance. As of Q3 2025, the company reported $215.1 million in revenue, a 12% year-over-year increase, driven by surging demand in its Loans and Emerging verticals segments. However, its stock price remains below key valuation benchmarks, raising the question: Is NRDS still undervalued despite its strong operational momentum?

Financial Performance: A Tale of Two Quarters

NerdWallet's Q2 2025 earnings were a disappointment, with an EPS of $0.11 missing analyst estimates by 45%. This contrasted sharply with Q3 results, where the company delivered an EPS of $0.34, exceeding expectations. For the full year 2024, NRDS generated $687.6 million in revenue-a 37% year-over-year jump-and reported GAAP net income of $30.4 million, or $0.38 per diluted share. These figures highlight a company in transition, with improving profitability despite macroeconomic headwinds.

The third quarter of 2025 further underscored NRDS's resilience. GAAP net income reached $26.3 million, or $0.34 per diluted share, while adjusted EBITDA hit $53.6 million. Notably, the Loans segment grew 66% year-over-year to $39.6 million, and Emerging verticals surged 83% to $46.9 million. These high-growth areas offset declines in Credit Cards (-25%) and SMB products (-15%), which were impacted by reduced organic search traffic.

Valuation Metrics: A Discount to Peers?

NRDS's valuation ratios suggest it remains attractively priced. As of September 30, 2025, the stock traded at a trailing PE ratio of 15.47 and a forward PE of 16.17 according to data from Bloomberg. These multiples are below the fintech industry average, which typically ranges between 20-25x. Additionally, NRDS's EV/EBITDA ratio of 13.03 and EV/FCF ratio of 9.31 indicate a discount relative to peers, particularly given its strong cash flow generation.

The company's balance sheet further supports its valuation case. With $120.6 million in cash and a Debt/Equity ratio of 0.04 according to stock analysis, NRDS is well-positioned to fund growth without overleveraging. Its Return on Equity (ROE) of 20.23% and Return on Invested Capital (ROIC) of 9.53% outperform many fintech rivals, suggesting efficient capital allocation.

Future Growth: Can NRDS Sustain Momentum?

Analysts project 7.65% annual revenue growth over the next five years, a figure that appears achievable given NRDS's strategic focus on high-margin segments. The Loans and Emerging verticals-driven by partnerships with lenders and expanding digital banking services-could become long-term growth engines. For instance, the Loans segment's 66% YoY revenue increase in Q3 2025 demonstrates untapped potential in a market where consumer demand for financial tools remains strong.

However, challenges persist. The Credit Cards segment's 25% decline underscores vulnerability to shifts in digital marketing dynamics according to Q3 results. If organic search traffic does not rebound, NRDS may need to reinvest in paid advertising, which could pressure margins. Additionally, the stock's beta of 1.43 indicates higher volatility than the S&P 500-making it a riskier bet for conservative investors.

Conclusion: A Buy for the Long-Term

Despite near-term volatility, NRDS appears undervalued when considering its revenue growth, improving profitability, and favorable valuation ratios. The stock's 52-week gain of 4.71% and a consensus price target of $15.40 6.65% above current levels suggest optimism among analysts. For investors with a multi-year horizon, NRDS offers a compelling opportunity to capitalize on the fintech boom, particularly as it scales its high-growth segments.

In the end, NerdWallet's ability to navigate sector-specific challenges while maintaining its cost discipline will determine whether its valuation catches up to its fundamentals. For now, the numbers tell a story of a company poised for re-rating.