Is Nu Holdings Ltd (NU) overvalued?
On Equity Rank's model estimate, NU trades 42% above its fair value. Nu Holdings Ltd (NU) last closed at $12.03; the multi-method model fair value is $8.48.
| Price | Model fair value | Price vs model |
|---|---|---|
| $12.03 | $8.48 | 42% above |
What the answer rests on
- 3 of 11 valuation methods put NU's value above its price and 8 put it below, so the methods disagree.
- To justify today's price, NU's free cash flow would need to grow about 3.3% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 75.9% a year.
- NU trades at 16.4 times its last year's earnings, against a median of 12.2 for 253 profitable Banks companies.
- Over the past year the price sat below the model fair value on 0% of trading days. The gap ranged from 15% above to 111% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind NU's fair value · What prices assume · Other companies