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Upstart: Looking For The Buy Zone

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Update - May 6, 2025

The fintech has slipped to $50 despite a big quarter likely due to not hiking guidance. 

  • Q1 GAAP EPS of -$0.03 beats by $0.16.
  • Revenue of $213.37M (+66.7% YoY) beats by $12.11M.
    • Upstart signed a forward-flow agreement for $1.2 billion with Fortress Investment Group. The main issue with numbers is likely guidance just generally matching current estimates. 
    • Q2 Revenues of $225 million vs. consensus at $226 million
    • 2025 Revenues at $1.01 billion vs. consensus at $1.01 billion. 
    The stock dips to a $4 billion market cap at the $42 after-hours price, or 4x sales targets. Upstart just traded down below $40, so the stock likely bounces at this level. 



    Update - Apr. 5, 2025

    Upstart has entered the buy zone on the dip to nearly $30. The AI lending stock has just been crushed after rallying to $90. The company will have to report a serious pullback to lending to warrant this dip. 

    Finviz Chart

    Original article posted on Mar. 30

    • Upstart Holdings faces economic weakness fears, though loan origination and conversion rates have improved.
    • The AI lending platform aims for $1 billion in 2025 revenue, further expanding into auto lending and HELOC markets.
    • The key UMI index already suggests a tough lending environment, with ultimate upside on an improving market in the next 1 to 2 years.
    • The stock is cheap at 4x sales targets, but investors should wait for better buy signals due to elevated short-term risks in fintech lending platforms.
    Upstart Holdings, Inc. (UPST) has completely rolled over with other fintech lending stocks due to fears over economic weakness ahead leading to defaults and bank partners pulling back from lending. The stock made the perfect run-up to $90 where hopefully investors took the warning to sell shares on another rally. My investment thesis remains more Neutral on Upstart as the current weakness suggests the stock might head even lower, but investors should be looking for a buying opportunity.


    Read the full article on Seeking Alpha. 

    Disclosure: No position mentioned. Please review the disclaimer page for more details. 

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