Nu Holdings Ltd. (NYSE: NU) saw its stock decline 1.1% to $13.91 by midday trading in New York on Tuesday, as investors digested a proxy filing that highlighted the limited impact of the company's share repurchase program. The shares fluctuated between $13.81 and $14.37 during the session.
The July 6 proxy filing disclosed that as of June 26, Nu had approximately 3.81 billion Class A shares and 1.02 billion Class B shares outstanding. While Class B shares represent only about 21% of total ordinary shares, they command roughly 84% of the voting power due to a 20-vote-per-share structure. This dual-class structure means that control remains concentrated among insiders, even as the public float trades based on operational fundamentals.
Nu's board authorized up to $1 billion in Class A share repurchases over the next 12 months starting June 4. At the current price of $13.91 per share, the full authorization would allow the company to buy back approximately 71.9 million shares, representing only about 1.5% of total ordinary shares or 1.9% of Class A shares outstanding. This relatively modest reduction in share count is unlikely to materially boost earnings per share or signal strong management confidence to the market.
The company's valuation remains elevated compared to some regional peers. Nu's market capitalization of $66.5 billion is roughly 20 times that of StoneCo Ltd. (NASDAQ: STNE) and 23 times PagSeguro Digital Ltd. (NYSE: PAGS). However, it still trails larger players like Itaú Unibanco Holding S.A. (NYSE: ITUB) and MercadoLibre Inc. (NASDAQ: MELI). The stock is trading at approximately $493 per first-quarter customer and about 19 times annualized first-quarter net income of $871 million.
Nu's growth narrative has shifted from user acquisition to monetization of its large customer base. The company reported over 135 million customers in the first quarter, with revenue exceeding $5 billion and a return on equity of 29%. Founder and CEO David Vélez Osorno described Q1 2026 as "another strong quarter," emphasizing the company's focus on rebuilding banking around artificial intelligence rather than simply adding AI features.
Credit quality remains a key concern. Nu's non-performing loan ratio for loans 15-90 days overdue rose to 5.0% in Q1 from the previous quarter, while loans over 90 days overdue edged down to 6.5%. Total deposits stood at $42.4 billion, with the credit portfolio reaching $37.2 billion, resulting in a loan-to-deposit ratio of 58.3%.
Analyst sentiment is mixed. Over the past three months, six analysts rated Nu a Buy, two a Hold, and one a Sell, with an average 12-month price target of $16.54. J.P. Morgan's Yuri Fernandes maintained a Buy rating with a $20 target, while Goldman Sachs' Tito Labarta also kept a Buy with a $22 target as of early July.
The company will hold its annual shareholder meeting on August 6 in São Paulo and online, where investors will vote on the 2025 accounts and the election of nine directors, including Vélez.
