Data source: Upstart. YOY = Year-over-year. But in 2022 and 2023, its loans dried up as interest rates rose, which caused its conversion rate, revenue, and adjusted EBITDA to decline.
However, the business is unlikely to recover while interest rates remain high, and it's unclear how fast or how much interest rates will come down. Upstart came onto the scene when they were near zero, and that may not happen again any time soon.
What Happened? Shares of aI-powered lending platform Upstart (NASDAQ:UPST) fell 13.7% in the afternoon session after J.P. Morgan analyst Reginald Smith downgraded some fintech stocks due to growth and valuation concerns.
With revenue growth expected to be 60% between 2023 and 2025, a rise in valuation multiple from current levels seems justified. At 15x revenues, the price estimate for UPST will be around $140 in early 2026, considering the 2025 revenue of over $800 million per the consensus estimate.
The analysts are definitely expecting Upstart Holdings' growth to accelerate, with the forecast 27% annualised growth to the end of 2025 ranking favourably alongside historical growth of 12% per annum over the past five years.
Upstart has an A+ rating with the Better Business Bureau and 4.9 out of 5 stars on Trustpilot, which is considered excellent, based on 46,495 ratings. Upstart received 666 out of 1,000 points on the J.D. Power 2024 U.S. Consumer Lending Satisfaction StudySM, which measures personal loan lender customer satisfaction.
Upstart Holdings has 10.63% upside potential, based on the analysts' average price target. Is UPST a Buy, Sell or Hold? Upstart Holdings has a consensus rating of Hold which is based on 5 buy ratings, 6 hold ratings and 4 sell ratings.
NASDAQ: UPST
A class action lawsuit has already been filed. If you wish to serve as lead plaintiff, you must move the Court no later than July 12, 2022. If you purchased Upstart securities between March 18, 2021 and May 9, 2022 and would like to join the action, please click “Join This Class Action.”
Upstart Holdings, Inc. San Mateo, California, U.S. The founding team includes Dave Girouard, former President of Enterprise Google; Paul Gu, a Thiel Fellow; and Anna Counselman, former Manager of Global Enterprise Customer Programs and Gmail Consumer Operations at Google.
In addition to the economic uncertainty risk, the company uses a new, unproven business model, which makes it a high-risk, volatile stock. Most investors are better off avoiding the stock. However, the potential upside may warrant existing investors holding onto their shares. I rate Upstart a Hold.
Unfortunately, you cannot negotiate the loan terms or the rate you are offered. Your rate is generated based on the details that you entered into your application along with your soft credit pull.
Blue Owl Capital Inc. has agreed to buy up to $2 billion of consumer installment loans from financial technology lender Upstart Holdings Inc.
With rates trending downward and expectations of further cuts in 2025, Upstart is poised for a resurgence. Rising loan demand, driven by decreasing borrowing costs, could significantly boost revenue growth in the coming quarters.
upstart is currently operational.
You can borrow between $1,000 and $50,000.
Its platform seeks to increase approvals for borrowers while simultaneously lowering risk to lenders. But its revenue has been cut in half in recent years because lenders weren't as willing to fund Upstart's loans -- there were high-rate opportunities elsewhere. However, Upstart is now back to growth.
Does Upstart hurt your credit score? Upstart allows you to prequalify for a personal loan at no cost to your credit; however, like most lenders, you'll need to submit to a hard credit pull before your application can be approved, which can cause your credit score to drop by a few points.
It is more common for a personal lender to verify your income, either with tax documents or bank statements, but the lender can absolutely call your employer to verify your status if they feel it's necessary to do so.
Future Growth
Upstart Holdings is forecast to grow earnings and revenue by 70.6% and 21.2% per annum respectively. EPS is expected to grow by 72.5% per annum.
Largest shareholders include Vanguard Group Inc, BlackRock, Inc., Susquehanna International Group, Llp, VTSMX - Vanguard Total Stock Market Index Fund Investor Shares, D. E. Shaw & Co., Inc., State Street Corp, Susquehanna International Group, Llp, IWM - iShares Russell 2000 ETF, Jane Street Group, Llc, and Susquehanna ...
APR range. Upstart is the winner when it comes to APR, which includes both your interest rates and origination fee. A 7.40 percent APR is very competitive in the current market, and it's hard to find other lenders offering such a low amount.
Cons Explained. Potentially high origination fee: Upstart charges origination fees. Depending on the lender and the borrower's profile, the fee can be as high as 12% of the loan amount. 5 Not all lenders charge origination fees, so borrowers with strong credit profiles should shop around.
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