The stock market wrapped up the week on a turbulent note, with major indices tumbling amid concerns over persistent inflation and a slowing economy. The Dow Jones Industrial Average slid 1.69%, the S&P 500 lost 1.71%, and the tech-heavy Nasdaq plunged 2.20%, reflecting a broader market selloff.
Among the hardest-hit stocks were ten companies that recorded double-digit declines, weighed down by disappointing earnings and investor sentiment. In this article, we take a closer look at Nu Holdings Ltd. (NYSE:NU) and how it compares to other market laggards.
Nu Holdings Ltd. (NYSE:NU) Among Friday’s Biggest Decliners
Nu Holdings Ltd. (NYSE:NU) extended its losing streak to five consecutive sessions on Friday, shedding 18.89% to close at $10.82 per share. This drop placed NU fourth among the ten worst-performing stocks for the day.
Despite delivering strong financial results, investors seemed more focused on concerns over its net interest margins. In the fourth quarter, NU reported an 85% surge in net income to $552.6 million, compared to $298.2 million in the previous year. Revenue also climbed 24% year-over-year, reaching $2.989 billion from $2.404 billion.
For the full year, NU more than doubled its net income to $1.972 billion, up from $983 million, while total revenue increased by 43% to $11.5 billion from $8.03 billion. Additionally, NU expanded its customer base by 4.5 million in Q4, bringing its total count to 114.2 million, a 22% year-over-year increase.
Why Did NU Stock Drop?
Despite these impressive figures, investor sentiment was dampened by NU’s shrinking net interest margin, which contracted for the second consecutive quarter. The decline of 17.7% was attributed to foreign exchange volatility and deposit strategy adjustments in Mexico and Colombia. This concern outweighed the company’s solid growth trajectory, leading to a selloff in the stock.
Should Investors Consider Nu Holdings Ltd. (NYSE:NU)?
While NU is experiencing near-term pressure, its long-term fundamentals remain strong. The company continues to expand its market presence, diversify its financial offerings, and sustain impressive revenue growth. However, for investors seeking high-growth opportunities, some AI stocks might present a more compelling case with strong upside potential and lower valuations.
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