Both Nu Holdings NU and Dave DAVE operate in the fintech and digital banking space, catering to the underbanked population. While DAVE targets the U.S. market, NU leads Latin America.
We have evaluated both companies to determine which of these two stocks investors should be inclined to add to their portfolios.
The Case for DAVE
Dave displayed a solid consistency in its top-line growth over the past quarters on the back of its pricing model, growing average revenues per expansion and ExtraCash originations. Notably, the company ended 2025 with a record quarter, marking its third consecutive period of more than 60% year-over-year growth in its top line.
Rising revenues were accompanied by 24.2% year-over-year growth in operating expenses in the fourth quarter of 2025. Despite this heavy rise in expenses, Dave reported a lofty 92% year-over-year rise in its adjusted net income. This disproportionate uptick in revenues and adjusted net income hints at operational prowess, highlighting the efficacy of Dave’s business model.
Dave’s credit risk mitigation engine, CashAI v5.5, is running in full throttle, enhancing the company’s credit quality as evidenced by a 26-basis-point reduction in the 28-day past due rate despite 50% year-over-year growth in ExtraCash originations. Banking on this risk management apparatus, Dave is finding success in delivering competitive credit offers to its members while generating robust unit economics that create a solid moat around its business.
Dave’s membership model is a standout that charges a monthly fee of up to $5 per month that provides access to services, including ExtraCash, Income Opportunity Services and Financial Management Services. This simple fee model is cheaper than the legacy banks, making it easier for the underbanked/underserved population to obtain credit easily.
The Case for NU
In the fourth quarter of 2025, the company added 4 million customers, ending the year with 17 million, reaching 131 million customers. This strong engagement and higher monetization fueled record quarterly revenues of $4.9 billion. The company’s ability to scale is vested in its ability to maintain a strong operational performance. In the fourth quarter of 2025, the company’s net income grew 45% year over year.
This solid growth is met with a monthly average cost to serve per active customer of 80 cents per customer, highlighting the strong operational prowess of the business. With an efficiency ratio dipping to 19.9% in the fourth quarter of 2025 from the year-ago quarter’s 20.3%, this solidifies a strong operating leverage of NU’s model.
On the AI front, the company is advancing at a swift pace. The company strengthened its AI model with the deployment of nuFormer in credit underwriting in Brazil, aiding the largest quarterly gain in the credit card market share in 10 quarters. AI has improved notification conversion, service quality and cross-selling, improving customer experience, while PIX with AI outpaced 10 million monthly active users.
Nu holds a solid balance sheet providing significant liquidity and an edge to grow. As of Dec. 31, 2025, the company holds a total capital of $8.9 billion, which includes $2.2 billion of excess capital in operating entities and $3 billion in cash. It is impressive how the company has managed to keep the available funding to $38.8 billion, which is nearly twice that of its net credit portfolio of $19 billion.
How Do Estimates Compare for NU & DAVE?
The Zacks Consensus Estimate for Nu Holdings’ 2026 sales is set at $21.2 billion, implying 34.3% year-over-year growth. The consensus estimate for earnings is held at 84 cents, implying a 35.5% increase over the preceding year’s actual. Two earnings estimates for 2026 have moved north in the past 60 days versus no southward revision.
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The Zacks Consensus Estimate for Dave’s 2026 sales is pegged at $694.1 million, indicating 25.2% year-over-year growth. The consensus estimate for earnings is $14.59 per share, suggesting an 10.7% year-over-year rise. Three earnings estimates for 2026 have moved north in the past 60 days versus one southward revision.
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NU Trades Cheaper Than DAVE
Nu Holdings is currently trading at a forward 12-month P/E ratio of 15.58X, which is slightly below the 12-month median of 19.93X. Dave is trading at 17.74X, substantially lower than the 12-month median of 24.19X. Although both stocks are trading at a discount compared with their historical valuations, NU is substantially cheaper than DAVE.
P/E - F12M
Image Source: Zacks Investment Research
Verdict: DAVE Is a Better Buy
While both Dave and Nu are prominent fintech contenders, Dave stands out as the better buy for investors willing to expose themselves to explosive operational prowess and domestic stability. While Nu Holdings commands Latin America with scalability, Dave has mastered the high-margin U.S. short-term credit market. DAVE’s CashAI v5.5 has reduced the credit risk of its portfolio despite a surging ExtraCash originations.
The most compelling reason to invest in Dave is its operational efficiency, which led to a 92% year-over-year surge in adjusted net income despite a significant rise in expenses.
DAVE flaunts a Zacks Rank #1 (Strong Buy) and NU carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
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Dave Inc. (DAVE) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
