$NU Walked Away From Monzo. The Numbers Tell the Bigger Story
As expected, the panic around $Nu Holdings Ltd.(NU)$ ’s potential Monzo acquisition turned out to be a non-event.
As I suggested two days ago, the deal is off, reportedly because Monzo’s VC investors wanted a valuation that was too high.
But the two most important takeaways from $NU’s announcement are about its strategy and capital discipline.
1️⃣ $NU believes its existing growth opportunity is big enough.
The company reaffirmed its focus on deepening its position in Brazil, scaling in Mexico and Colombia, and building its presence in the U.S. and globally through Nu Global.
In other words, $NU doesn’t need to chase acquisitions just to keep growing.
2️⃣ Every acquisition has to clear the return hurdle.
The company explicitly said investment decisions are based on strategic fit, returns relative to its cost of capital, and long-term value creation per share.
That last point matters. Any deal would need to generate meaningful incremental EPS growth after accounting for dilution.
David Vélez isn’t going to spend billions just for the sake of doing a deal.
📊 Now look at the business over the past two years:
|
Metric |
2 Years Ago |
Today |
|---|---|---|
|
Share price |
$14 |
$13 |
|
Customers |
105M |
139M |
|
ARPU |
$11 |
$17 |
|
Net income |
$1.5B |
$3.6B |
More customers. Higher ARPU. Net income more than doubled.
Yet the stock is trading around $13, at roughly 13x forward earnings.
🎯 Analyst price targets:
-
Low: $10 (-26%)
-
Consensus: $18 (+33%)
-
High: $23 (+69%)
The Monzo deal is off. The bigger question is whether the market will eventually give $NU more credit for the growth already happening inside its existing business.
That’s what I’m watching. 👀
Markets are always moving - and sometimes, the best move is knowing what works for you.
With Treasury yields, oil prices and rate expectations keeping markets on edge this week, investors are once again thinking carefully about where to position next. There’s no one-size-fits-all choice in investing — and the same goes for Tiger Merch. This month’s hot picks are in, featuring the Tiger Toiletry Bag, Universal Travel Adapter, Tiger Umbrella and more favourites chosen by fellow Tigers.
Explore the Monthly Hot Picks in Tiger Coin Mall, now 12% OFF for a limited time.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
