OUTTHUNDER BETA

NU

buy Researched 2026-10-26 20:58 UTC

PriceDayYTD
Oct 23 close 15.16
Oct 26 close 12.59
−17.0%−24.8%

Trend

16.1213.8611.60↑ 14.5212.59↓ 11.60Volume338.3MClose21-day50-day200-dayApr 28Jul 29Oct 26

The close is 13.3% (2.50 ATRs) below the 21-day average, which is rising (+0.6% over 3 sessions), and 13.3% (2.50 ATRs) below the 50-day average, which is also rising (+0.8% over 10 sessions). That is a pullback below rising averages; the averages alone do not establish a downtrend.

Bull case
  • Q2 profitability provides evidence of operating leverage: reported net income was $1.1 billion, up 49% year over year, and one report described revenue per user of $17 against $1 of cost.
  • Nu’s U.S. entry through a partner bank, while it pursues a national bank charter, could broaden its growth opportunity if the expansion succeeds.
  • Credit signals are mixed rather than uniformly deteriorating: 90+ day delinquency rose 35 bps to 6.9% as loans grew 37% year over year, but 15–90 day delinquencies improved; reported cost of credit fell 9% quarter over quarter and risk-adjusted NIM rose to 12.4% from 9.5%.
Bear case
  • Brazil remains a material driver: NU’s 63-session correlation with EWZ is 0.81, and NU lagged EWZ by 9.0 percentage points over 3 months and 32.9 points over 12 months. Election-related policy and currency concerns could therefore keep pressure on the shares.
  • The delinquency increase has not been resolved as an earnings risk. The supplied evidence does not establish a vintage-loss or charge-off trend, so it cannot determine whether 6.9% reflects manageable migration or worsening realized losses.
  • U.S. expansion and crypto offerings may test credit quality and margins, according to the supplied analyst discussion; the available research does not quantify the risk or its likely impact.
  • Price momentum is weak: 8 of the last 10 sessions closed lower, and the shares are 13.3% below both rising short- and medium-term averages. The supplied fundamentals endpoint also returned no valuation data, limiting confidence about the entry price.
Reconciliation

Bullish coverage and operating reports conflict with the recent price decline: half the dated items predate or fall on October 19, since when NU fell 13.2% in 5 sessions (2.5 ATRs versus 2.2 ATRs of ordinary drift), and the 7 items dated October 26 are one story, not independent confirmation; I follow the current price for entry timing, while treating pre-move targets as stale rather than current evidence.

Decision

Asked: I don't own it. I'm considering buying it for the long term.

  • Action: buy.
  • Condition: UNCONDITIONAL.
  • Timing: I would start a long-term position now rather than wait for confirmation, accepting the risk of owning through further volatility and a possible continued pullback.
  • Distance: N/A — the action is unconditional; review price levels are listed below.
  • Invalidation: The call would be wrong if the next earnings report showed 90+ day delinquency rising above 6.9% alongside rising cost of credit, indicating credit deterioration is reaching earnings.
  • Forecast: 0.56 probability that NU’s total return beats SPY through the first close after its November 12 earnings report; reported profit growth and monetization move the estimate above 0.50, tempered by Brazil exposure and unresolved credit-loss evidence.

Technical analysis: computed from daily prices as of 2026-10-26. Not an input to the decision above: each is scored against SPY on its own.

  • MACD (12, 26, 9): BEARISH, below its signal line, crossed 2 sessions ago (2026-10-22). Line 0.00, signal 0.17, histogram -0.17 and widening.
  • Awesome Oscillator (5, 34): BULLISH, above zero, crossed 13 sessions ago (2026-10-07). +0.08 and falling.
  • Chaikin Money Flow (20): BULLISH, buying pressure: volume is backing the up days, crossed 1 session ago (2026-10-23). +0.22 and rising.

Review triggers

  • Review-by: 2026-11-12 — NU earnings report.
  • Price-below: $11.60 (52-week low; 7.9% or 1.29 ATRs below the latest close).
  • Price-above: $14.52 (21- and 50-day averages; 15.3% or 2.51 ATRs above the latest close).
  • Volume-above: 91,427K shares (90th-percentile threshold; already exceeded in the latest session).

Scaling in: consider building this entry in parts (dollar-cost averaging) rather than as a single order — for example, split the amount across several sessions or either side of the review date (2026-11-12 — NU earnings report.).

Dive deep

Market overview of 2026-10-26 20:55 UTC →