10 Stocks with Best Earnings Growth for the Next 3 Years

8. Nu Holdings Ltd. (NYSE:NU)

Number of Hedge Fund Holders: 104

On June 15, Citi trimmed the price target on Nu Holdings Ltd. (NYSE:NU) from $18 to $13, while downgrading the stock to Neutral from Buy. According to the firm, the company’s growth will come at the cost of monetization and profitability due to its credit-dependent nature. The exposure to credit cards and personal loans increases its “vulnerability to a crowding-out effect on borrowers’ repayment capacity,” the firm added.

Back on June 3, Susquehanna downgraded Nu Holdings Ltd. (NYSE:NU) to Neutral from Positive and cut the price target from $18 to $13. In the first quarter, operating margins dropped 760 basis points to 19.2%, given the credit card push in Brazil and the Mexico expansion. The leadership restructuring, with the departure of Brazil-based CFO Guilherme Lago and the hiring of Visa’s North America CEO Rob Livingston, will accelerate the company’s global expansion, the firm said. Thus, making NU one of the stocks with the best earnings growth for the next 3 years.

The firm also flagged some concerns. As noted by Susquehanna, the company’s margins have been under strain due to multiple factors that show little sign of easing in the near term. The firm believes that Nu Holdings Ltd. (NYSE:NU) is entering another heightened investment cycle, which will weigh on the shares until there is greater visibility into the outlook.

Nu Holdings Ltd. (NYSE:NU), founded in 2013, is a Brazilian provider of a digital banking platform offering spending, mobile payments, transactional, savings, and investing solutions.