Should You Buy, Hold or Sell Nu Holdings Stock Before Q2 Earnings?

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NU has a strong history of earnings surprises. Earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed in one, with the average earnings surprise being 5.40%.

Here Is What Our Quantitative Model Predicts for NU

Our proven model does not conclusively predict an earnings beat for NU this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

NU has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell). 

You can see the complete list of today’s Zacks #1 Rank stocks here.

What Should Investors Expect From NU’s Q2 Earnings?

Nu Holdings enters its second-quarter 2026 earnings with momentum, but the key question is whether growth stayed balanced as credit expanded. First-quarter revenues topped $5 billion, customers exceeded 135 million, and net income reached $871 million. The second quarter is likely to have witnessed further customer growth and deeper engagement across Brazil, Mexico and Colombia. 

Credit is expected to have been the biggest swing factor. Nu ended the first quarter with a $37.2 billion credit portfolio, up 40% year over year, while provisions rose because of seasonality, portfolio growth and a heavier unsecured mix. Management said first-quarter seasonality should fade, so the second quarter may show lower credit pressure and recovering risk-adjusted margins.

Brazil is likely to have remained the earnings engine. Nu has been expanding in unsecured loans, SME banking, secured credit and affluent customers, while NuCel surpassed one million users in June. These efforts are expected to have supported activity and cross-selling, though faster credit growth could keep provisions elevated and asset-quality trends firmly in focus. 

Mexico and Colombia should have added another growth layer. Mexico had crossed 15 million customers, while Colombia reached five million in May. Continued deposit growth, card adoption and wider product use are expected to have helped revenues, but investment in these markets and international plans may have kept operating expenses above the first quarter’s low level.

Efficiency will, therefore, be an important second-quarter test. Nu’s first-quarter efficiency ratio of 17.6% benefited partly from expense timing, and management expects the 2026 ratio to move toward roughly 20%. A second-quarter rise in costs would be unsurprising, but investors will want revenue growth and credit normalization to protect earnings momentum.

NU’s Price Performance & Valuation

NU shares have declined 18.5% so far in the year, narrower than close fintech peers SoFi Technologies, Inc. SOFI and StoneCo Ltd. STNE over a comparable recent period. SoFi and StoneCo shares have plunged 31.3% and 32.7%, respectively. The comparison suggests that investors have shown relatively greater confidence in Nu’s performance and growth outlook, as its shares have held up better than those of close fintech peers amid broader sector weakness. 

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NU trades at approximately 13.28 times forward earnings. That is well below SoFi Technologies’ forward multiple of about 24.71 times but considerably above StoneCo’s 4.38 times. The discount to SoFi appears reasonable because SoFi operates in the competitive U.S. market and receives a higher growth premium. Nu Holdings’ premium over StoneCo reflects its larger customer platform, stronger earnings expansion and broader consumer-banking opportunity.

Valuation

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How to Play NU Stock Ahead of Q2 Earnings?

The second-quarter setup remains mixed. Nu continues to add customers, broaden products and deepen engagement, while its low-cost digital model supports strong long-term earnings power. Management also expects first-quarter credit seasonality to normalize, which could help risk-adjusted margins improve. However, the pace of unsecured lending, rising provisions, planned spending on AI and international expansion, and the expected normalization of operating costs create a tougher near-term risk-reward balance.

The company’s growth story is still attractive, but much of that strength may already be reflected in market expectations, leaving less room for execution mistakes. Until the second quarter shows clearer evidence that credit costs are easing while profitability remains resilient after expenses normalize, investors may be better served by reducing exposure and waiting for a more favorable entry point.

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This article originally published on Zacks Investment Research (zacks.com).

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