Nubank’s Growth Trajectory: A Deep Dive into Q4 2025 Expectations
Nu Holdings is entering its fourth-quarter 2025 earnings report with significant anticipation surrounding profit growth and, crucially, the evolution of credit risk alongside its expansion in Mexico. Investors are closely watching to see if the fintech giant can maintain its momentum.
Strong Financial Projections for Q4
The consensus, compiled by Bloomberg, anticipates a high double-digit year-over-year increase in earnings. This optimism is fueled by the stock’s impressive 48.6% return over the past twelve months and continued positive price targets from analysts.
Revenue estimates for the quarter stand at US$4.581 billion, representing a 55.7% year-over-year growth. Net profit is projected to reach US$918 million, a 55% increase compared to the same period last year. Adjusted earnings per share (EPS) are expected to be US$0.187 and GAAP EPS at US$0.180, with year-over-year expansions of 55.8% and 59.0%, respectively. Return on equity is forecast at 33.4%, and return on assets at 5.1%.
Nubank has consistently exceeded expectations, surpassing adjusted EPS forecasts in seven of the last eight quarters and revenue estimates in seven of eight. This track record builds confidence in another positive surprise.
Mexico: A Key Growth Driver and Risk Factor
Nubank’s expansion into Mexico is a central theme for investors. Regulatory data indicates that Nubank closed 2025 with approximately MXN$113 billion in deposits, a 21% year-over-year increase, compared to a 61% increase in its gross loan portfolio. The loan-to-deposit ratio stands at 27.5%.
Despite a net loss of MXN$427 million in Mexico and a non-performing loan ratio of 7.1%, Nubank remains committed to the market, planning to invest US$4.2 billion by 2030, with US$2.5 billion earmarked for strategic spending over the next four years. With nearly 14 million users and a recently secured banking license, the company is poised to launch full-fledged banking operations, including payroll portability and increased deposit limits.
Analysts at JPMorgan note that Nubank doesn’t appear overly concerned about asset quality in Mexico, even as data shows a slight increase in non-performing loans. However, Citi analysts highlight that personal loans require attention, while credit cards continue to demonstrate resilience.
Profitability and Cost Management
Analysts are similarly focused on the pace of portfolio expansion and its impact on the risk-adjusted net interest margin. The consensus expects sequential loan growth to remain in the high single digits, supported by increased origination during the second and third quarters and seasonal year-end factors.
Goldman Sachs projects a reported net profit of US$891 million, 14% higher than the previous quarter and 61% higher year-over-year, with a ROE of 32.3%. They anticipate loan growth of 7% quarter-over-quarter and 58% year-over-year, driven by increased credit card limits and unsecured personal loans, while secured lending may experience slower growth due to new rules surrounding the FGTS fund in Brazil.
JPMorgan maintains an Overweight rating with a price target of US$18, stating that Nubank is the most successful neobank in Latin America, serving approximately 123 million customers across Brazil, Mexico, and Colombia.
What Analysts Are Saying
Bloomberg Intelligence analyst Gabriel Gusan believes Nubank likely ended 2025 with positive momentum, even amidst challenging macroeconomic conditions in Brazil.
XP Investimentos analysts Bernardo Guttmann and Matheus Guimarães anticipate a strong quarter, particularly driven by Mexico and solid performance in Brazil.
Valuation and Recommendations
The majority of analysts (80%) recommend buying the stock, with 15% suggesting a hold and 5% recommending a sell. The average twelve-month price target is US$19.25, representing a potential upside of 17.5% from the current price of US$16.38.
Frequently Asked Questions
Q: What is driving Nubank’s growth in Mexico?
A: Increased deposit inflows, strategic investments, and the recent banking license are key drivers of growth in Mexico.
Q: What are the main risks associated with Nubank’s expansion?
A: Credit risk, particularly in personal loans, and maintaining cost discipline are key risks to monitor.
Q: What is the consensus EPS estimate for Q4 2025?
A: The consensus EPS estimate is US$0.187.
Q: What is Nubank’s investment plan for Mexico?
A: Nubank plans to invest US$4.2 billion in Mexico by 2030, with US$2.5 billion allocated to strategic spending over the next four years.
Did you grasp? Nubank has surpassed 100 million clients across its operations in Brazil, Mexico, and Colombia.
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