Upstart Holdings (UPST) Stock: Can AI Lender Beat Credit Crunch?

Upstart once soared with its unique lending platform, but a bad decision and current credit scenario make them look bad. Founded in 2012, with headquarters in San Mateo, California, Upstart Holding Inc. is a leading fintech operating in the US. With its subsidiaries, they operate as a cloud-based Artificial Intelligence (AI) lending platform.

Upstart Holdings Inc. – The AI Lending Platform

Upstart is an AI lending platform. It has partnered with numerous banks and credit unions to provide consumer loans using unorthodox variables like education and employment to predict receivers’ creditworthiness. Their business is built on a belief that access to credit is fundamental for unlocking opportunities and facilitating growth.

Their internal testing methods show that their system produces 75% fewer defaults, with the same approval rates. They also approve upward of 170% more loans with similar default rates in contrast with the largest lenders in the United States.

In 2021, Upstart was enjoying a great run: their loan volumes increased by 338% and revenue by 264%; its stock increased by 10 times. Then, inflation hit the market forcing central banks to raise interest rates. Borrowers had to rethink before taking loans and lenders to consider who to give the loans to.

At that time, the management decided to repurchase $178 million of their stocks in 2022. Interestingly, they didn’t consider repurchasing when Upstart was thriving in 2021. According to experts, this decision could be a bad move and might haunt them.

Upstart Holdings Inc. (UPST) – The Number Game

When writing, UPST stock was trading at $15.23 with a drop of 3.61%; previous close and open were at $15.80 and $15.74, respectively. In contrast, the fifty-two-week change was a drop of 87.90%. The market cap was $1.287 billion, and the average share volume was 6.82 million shares. Analysts have predicted a price target of $31.69 with a 108.1% upside.

As of December 2022, the following readings have changed year-to-year; Revenue dropped by 50.40% from $151.43 million, and operating expenses decreased by 20.39% from $161.92 million. Net income then was negative $55.26 million and corrected by 193.76%.

Earnings per share dropped by 128.09% from negative $0.25. Revenue per share was $10.31, and the quarterly revenue growth suffered by 50.40%. The last earnings were reported on February 14, 2023, where revenue estimated was $133.609 million and reported was $146.913 million, with a surprise of $13.304 million and a rise of 9.96%.

Upstart Holdings Inc. (UPST) – Candle Exploration

UPST stock is trading at its lower points, and a downward-sloping trend line indicates a short-term bear trend. But on a broader level, the price has been consolidating between $25.74 and $12.14 since November 2022.

The $12.41 mark will act as a strong support, and the price is not expected to exceed that. As the moving average also moves sideways, a clear movement can not be made. The price should consolidate between S1 and the $19.91 mark for some time; if the price crosses the upper mark, it could test R1 and move to R2.

Disclaimer:

The views and opinions stated by the author, or any people named in this article, are for informational purposes only and do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.

Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing