• Nu Holdings (NU) stock hasn’t provided a post-initial public offering (IPO) performance that investors probably hoped for.
• Nevertheless, it’s too early to pronounce judgment on this promising Latin American personal finance company.
• Investors should stay the course with Nu Holdings, and possibly even add to their positions.

Nu Holdings (NYSE:NU) is a Brazilian financial technology (fintech) company that’s also known as Nubank. NU stock is fairly new, as its public debut on the New York Stock Exchange took place late last year.

IPO investing can be risky, and so can international investing. There’s certainly no guarantee that the Nu Holdings share price will recover from its post-IPO slump.

Yet, it’s entirely possible that NU stock will just be a late bloomer. Sometimes, there’s a delayed reaction as Wall Street can take a while to warm up to a newly listed company.

As we’ll discover, there’s a vast addressable market that Nubank is seeking to capture. Furthermore, the company’s financials should motivate the stockholders to stay in the trade, and perhaps pick up a few more shares.

What’s Happening With NU Stock?

Going back to the beginning, Nu Holdings established a price range of $10 to $11 per share, but then reduced the IPO range to $8 to $9 per share. Finally, NU stock commenced trading on the New York Stock Exchange on Dec. 9, 2021, at around $9. Likely due to the buildup of investor enthusiasm, the stock shot up right out of the gate, hitting $12.24 on Dec. 10.

As that enthusiasm declined, so did the share price. By March of 2022, NU stock had collapsed to $6 before pushing back toward $8.

Bear in mind that technology stocks and financial-sector stocks were hit hard in late 2021 and early 2022. So, it’s possible that Nu Holdings’ shareholders suffered collateral damage. Despite its lack of post-IPO performance, there’s no need to give up on NU stock. As the company points out, Latin America’s personal finance market is ripe for disruption.

Consider that 65% of people in Mexico are unbanked, and 90% of them are without a credit card. Also, in Colombia 55% of people are unbanked and 86% have no credit cards, while in Brazil, 30% are unbanked and 75% are without credit cards.

Nubank Addressing the Issue

So, as you can see, there’s a huge Latin American market for Nubank to address. By offering personal finance options to the unbanked, Nu Holdings is providing a public service while also expanding its customer base.

The data proves this point convincingly. During 2021’s fourth quarter, Nu Holdings added 5.8 million customers and achieved a total of 53.9 million customers across Brazil, Colombia and Mexico. Moreover, the customers appear to be spending more, on average. For Q4 2021, Nu Holdings’ average revenue per active customer increased to $5.6, from $3.3 in the year-earlier quarter.

Does all of this add up to strong revenue for the company? The answer is definitely yes.

In 2021’s fourth quarter, Nu Holdings reported $635.9 million in total revenue, up 224.3% year-over-year on a currency-neutral basis.

Additionally, the company posted full-year 2021 revenue of $1.7 billion, which established a new record for Nu Holdings. Given the company’s strong financial performance, Wall Street ought to warm up to Nu Holdings sooner or later.

What You Can Do Now

Don’t be too quick to pronounce judgment on NU stock. It’s still early in the game, and the loyal shareholders could prevail in the end.

It might have surprised you to learn about the percentages of unbanked individuals in particular Latin American regions. This is an issue that Nubank has an opportunity to address.

At the same time, Nu Holdings is demonstrating growth in its user base and revenue. Therefore, the company’s investors can hold their shares with confidence, and even consider adding to their positions.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.