Down 30% From Its Highs, This Warren Buffett Favorite Is Trading Under $20

Quick Read

• Nu Holdings (NU) commands 4 strong buys and 15 buys from Wall Street analysts with undervalued ratios despite generating 30.1% return on equity.

• Nubank’s valuation has compressed despite hitting $5B in quarterly revenue for the first time, though management attributes this to seasonality and mix rather than fundamental asset quality deterioration. Risk is there, but the upside narrative is just as real.

• The analyst who called NVIDIA in 2010 just named his top 10 stocks and Nu Holdings wasn’t one of them. Get them here FREE.

Stocks trading under $20 often get dismissed as lottery tickets, but every so often a genuine compounder slips into that bucket because sentiment has cracked while fundamentals remain intact. Right now, one fintech that formerly counted Berkshire Hathaway (NYSE:BRK.B) as a holder is sitting roughly 30% below its highs, and the pullback looks more like an opportunity than a verdict on the business.

With that in mind, here is one stock trading under $20 that analysts believe has serious upside potential.

Nu Holdings (NYSE: NU)

Nu Holdings (NYSE:NU), the parent company behind Nubank, is the digital banking platform that has systematically disrupted incumbent banks across Brazil, Mexico, and Colombia.

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Shares closed the most recent session at $13.16, which puts the stock comfortably inside our $20 ceiling and well below the 52-week high of $18.98. For a retail investor, that is the kind of entry price that makes it easy to build a position without overcommitting, especially in a name that has scaled from a Brazilian credit card startup into a banking franchise with more than 135 million customers.

Nubank just put up its first $5 billion revenue quarter in company history, with net income climbing to $871 million, up 41% year over year on an FX-neutral basis, and net income has been compounding at more than 80% annually since 2022. The credit portfolio reached $37.2 billion, up 40% year over year FX-neutral, while deposits hit $42.4 billion. Wall Street is on board: 4 strong buys, 15 buys, and just 2 holds, with an average price target of $19.43, implying meaningful upside from current levels.

Nubank trades at a forward P/E near 18 with a PEG ratio of 0.753, which is unusually cheap for a bank growing this fast and generating a return on equity of 30.1%. CEO David Vélez framed the runway bluntly on the earnings call, noting that even after years of share gains, “it’s still day one for Nubank in Brazil” with only roughly 7% of a $100 billion-plus profit pool captured. Mexico, where the customer base has grown from 2 million to 15 million in four years, just hit its first quarter of IFRS profitability. Layer on the conditional OCC approval in January 2026 for a U.S. national bank charter, and the optionality starts to look enormous.

On the other side of the ledger, expected credit losses jumped 76% year over year to $1.72 billion, and the 15-90 day NPL ratio climbed to 5%, which is what spooked the market after the May 14 report. CFO Guilherme Marques do Lago argued the provisions reflect “seasonality, growth, and mix” rather than asset quality deterioration, and pointed to total coverage at 16.2% of the portfolio. That is worth watching, but it does not unwind a thesis built on customer growth, margin expansion, and geographic optionality.

For investors comfortable with emerging-market fintech exposure, Nubank under $20 looks like a high-conviction setup hiding in plain sight.

The Bottom Line

The recent selloff has created a more attractive entry point, but the credit cycle, currency exposure, and U.S. expansion costs all deserve a closer look before committing capital. Do your own research, size positions appropriately, and treat the under-$20 tag as a starting point for diligence rather than a finish line.

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