THE Nubank (NAKED) collapsed 15% in New York this Friday (20), at US$ 3.63, with BDRs on B3 (NUBR33) following the same pace, even though BTG Pactual raised the stock’s recommendation from “sell” to “neutral”.
The performance partly reflects the general decline in american indiceswith investors selling stocks amid concerns over whether the Federal Reserve will be able to fight inflation effectively without causing a recession.
The prospect of high interest rates directly impacts the shares of companies with a tech profile, such as Nubank. THE BTGhowever, said that since February he had the recommendation to sell the company’s shares because he saw the company more like a bank than a tech.
Since then, the stock has dropped 58% to the day before closing, trading at 4.6x market value to equity (P/BV) for 2022 (vs. 11.6x on Feb. 10).
“Although still indisputably expensive, Nubank now has a market value of US$ 19.9 billion, which seems more reasonable,” said BTG, in a report this Thursday (19) signed by Eduardo Rosman and team.
BTG said he is a big fan of Nubank’s history and that he believes the company is “very well positioned” to possibly become Latin America’s leading fintech in the next five to 10 years.
What can change the game for Nubank
After the balance of the first quarter, local investors and industry experts began to point out that Nubank may be taking too many risks by growing at such a rapid pace in consumer unsecured loans – mainly in the low-income segment.
For BTG, if the bank shows that it can go through a bad cycle – of high interest rates – relatively unscathed, it will make it clear that it is unique in the market.
“Unlike other banks that have increased their customer base and tested credit over time, Nubank has achieved a massive customer base practically just by offering credit cards (93% of customers pay on time)”.
So, highlights BTG, for having a wide range of customers, “with good data”, and being able to operate with small loans for several users, “Nubank may be something we have never seen before”.
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Source: Moneytimes
I am an author at Global happenings and I mostly cover automobile news. In my time working in the automotive industry, I have developed a keen interest in the latest developments and trends. My writing skills have also allowed me to share my knowledge with others through articles and blog posts.
