Warren Buffett's Fintech Bet Wavers As Earnings Nearly Double
Brazil-based digital bank Nu Holdings (NU) met earnings expectations for the third quarter late Wednesday. Nu stock, owned by Warren Buffett, fell in after-hours trading.
Nu Earnings Nearly Double, Sales Jump
For Q3, Nu posted earnings of 11 cents per share, in line with views, and nearly doubling from six cents a year ago.
Revenue jumped 38% year over year, to $2.94 billion, beating FactSet estimates for around $2.6 billion. However, revenue growth slowed from a 52% gain in the prior second quarter.
During the three months ended on Sept. 30, Nu added 5.2 million customers. Gross margin expanded to 46% from 43%. Net interest income increased by 63%.
Nu Stock Drops In Extended Trading
Shares lost 3.5% late Wednesday. Nu stock also fell in Wednesday's regular stock market action, near the top of the buy range from a late-October breakout.
On Tuesday, Nu Holding shares hit a fresh post-IPO high.
IBD had named Nu as Stock Of The Day as it broke out on Oct. 28, ahead of earnings.
Warren Buffett, Cathie Wood Own Brazilian Fintech
Nu Holdings touts itself as the fourth-largest Latin American bank by number of customers, 109.7 million reported at the end of Q3. Nu says it's using data and technology to create a digital banking platform that is transforming people's lives.
Reuters reported Nov. 7 that Brazil's central bank has been raising interest rates at an accelerated pace, amid high inflation. Higher rates generally boost net interest income.
Nu stock saw wild swings after its U.S. initial public offering in December 2021. But the company has delivered positive earnings every quarter since the third quarter of 2022, according to FactSet.
Both Warren Buffett and Cathie Wood own Nu stock, though they are very different types of investors. The financial technology company is a top-10 holding in Buffett's equity portfolio.
Wood also owns MercadoLibre (MELI), a Latin American online retail play. Last week, MELI stock sank amid earnings, but found support at the 200-day line.
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