Core Viewpoint - Upstart is experiencing a resurgence in growth after a period of volatility and declining revenue, with favorable macroeconomic conditions and improved financial performance indicating a potential investment opportunity [1][4][5]. Group 1: Company Performance - Upstart's stock price has decreased by 23.5% year to date, but it trades at an attractive valuation of 19 times forward one-year earnings, suggesting a good entry point for investors [1]. - After two years of declining revenue, Upstart's revenue more than doubled year over year in the second quarter, and transaction volume increased by 159% [5]. - The company regained profitability on a GAAP basis a quarter earlier than expected, indicating a positive turnaround [5]. Group 2: Macroeconomic Factors - The Federal Reserve's prime lending rate and market interest rates have started to decline, which is beneficial for borrowers and enhances the lending environment [4]. - Lower interest rates facilitate loan repayments and reduce default risks, allowing Upstart to better identify creditworthy candidates for lenders [4][6]. Group 3: Future Outlook - The Federal Reserve is expected to cut the federal funds rate two more times before the end of the year, which should support Upstart's growth trajectory [6]. - Management anticipates a 73% year-over-year increase in sales for the third quarter, with a projected net income of $9 million [6]. - Upstart has significant long-term potential in the credit evaluation market, valued at $1 trillion, making it an attractive investment for risk-tolerant investors [7].

Core Insights - Upstart Holdings, Inc. (NASDAQ:UPST) is recognized as one of the 12 best fintech stocks to buy according to analysts, despite recent market pullbacks in consumer finance stocks due to concerns over subprime credit trends [1][2]. Company Overview - Upstart Holdings, Inc. operates a cloud-based AI lending platform in the US, partnering with banks and credit unions to provide various loan products, including personal loans, automotive retail and refinance loans, home equity lines of credit, and small-dollar relief loans [4]. Market Conditions - Citizens has reaffirmed its Market Perform rating for Upstart, citing isolated indications of rising delinquencies among selected subprime auto and personal loan lenders, which includes Upstart as one of the affected companies [2]. - The lending market is increasingly focusing on undocumented borrowers, contributing to a cautious outlook for consumer lenders like Upstart [2]. - Additional factors affecting the outlook include speculation over the resumption of student loan repayments and renewed focus on tariff impacts on prices [3].

Core Insights - Upstart Holdings, Inc. (UPST) experienced a decline of 2.69% in its recent trading session, closing at $46.50, which is significantly lower than the S&P 500's gain of 0.53% on the same day [1] - The company has seen a substantial loss of 29.78% over the past month, underperforming compared to the Finance sector's loss of 2.23% and the S&P 500's gain of 0.71% [1] Earnings Forecast - Upstart Holdings is set to release its earnings report on November 4, 2025, with an expected EPS of $0.42, reflecting an 800% increase from the same quarter last year [2] - Revenue is projected to reach $281.02 million, indicating a 73.32% increase compared to the year-ago quarter [2] Full Year Projections - For the full year, earnings are estimated at $1.66 per share and revenue at $963.44 million, representing increases of 930% and 51.36% respectively from the previous year [3] - Recent analyst estimate revisions suggest a favorable outlook on the company's business health and profitability [3] Analyst Ratings and Valuation - The Zacks Rank system currently rates Upstart Holdings as 3 (Hold), with the consensus EPS estimate remaining unchanged over the last 30 days [5] - The company is trading at a Forward P/E ratio of 28.79, which is a premium compared to its industry's Forward P/E of 12 [6] Industry Context - The Financial - Miscellaneous Services industry, to which Upstart belongs, ranks in the top 37% of all industries according to the Zacks Industry Rank [6] - The Zacks Industry Rank indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Core Insights - Upstart Holdings (UPST) is expanding its services beyond personal loans, leveraging its AI-powered platform to enter new markets such as auto loans, home equity, and small-dollar credit, with these segments accounting for nearly 20% of new borrowers in Q2 2025 [1][8] - The company has more than doubled its revenues year over year and achieved GAAP profitability earlier than expected [1] Auto Lending - Auto loan originations surged 87% sequentially to $114 million in Q2 2025, driven by the adoption of Upstart's Auto Retail software among car dealerships [2][8] - A focus on simplifying financing has led to increased dealer-driven loan requests and finalized agreements [2] Home Equity - The home equity segment has seen a nearly ninefold increase in originations year over year, reaching $68 million, facilitated by advancements in instant property verification technology [3][8] - This technology allows borrowers to complete ownership and income checks in under a minute, streamlining the traditionally slow HELOC process [3] Small-Dollar Loans - Small-dollar "relief" loans have increased by 40% sequentially as Upstart tests its AI models across a broader borrower base [4] - The latest underwriting model, Model 22, has improved accuracy and conversion rates, supporting the growth of these new verticals [4] Diversification Strategy - Upstart plans to move most Auto and Home loans off its balance sheet by late 2025, relying on third-party funding and partnerships with banks and credit unions to support this diversification [4] Industry Comparisons - Other fintech companies like PayPal and Intuit are also diversifying their revenue streams, with PayPal expanding into merchant solutions and consumer credit, while Intuit has developed a full financial ecosystem [5][6] Valuation and Performance - Upstart's shares have increased by 16.8% over the past six months, although this performance lags behind the broader industry and the S&P 500 [7] - The current forward 12-month Price/Sales (P/S) ratio for Upstart is 3.77X, which is above the industry average of 3.52X, indicating that the shares may be overvalued [9] Earnings Estimates - The Zacks Consensus Estimates for EPS for the full years 2025 and 2026 have been revised downward, but they still indicate significant year-over-year increases [10]

Core Insights - Upstart Holdings Inc (UPST) has experienced a significant market loss of nearly 24%, placing it on Barchart's one-month losers list, with a technical opinion indicator rating of 56% Sell, indicating a weakening short-term outlook [1][2] - Wall Street analysts have a consensus rating of Hold for UPST shares, with three analysts rating it as Strong Sell, reflecting a negative sentiment towards the stock [2] - Over the past year, UPST's equity has lost 3.48%, further indicating a downward trend [2] Quantitative Analysis - UPST stock has a negative bias, with an exceedance ratio of only 46.4% over a 10-week period since its public market debut, suggesting limited profitability potential [5] - The projected price range for UPST stock is between $47 and $53, with most outcomes expected to cluster between $48.50 and $50.50, while the stock closed at $51.07 [5] - Despite the negative outlook, a quantitative signal suggests that there may be potential upside for UPST stock in the near future [3][6] Volatility Insights - Volatility in UPST stock is influenced by current market conditions, with the principle that tomorrow's volatility is largely dependent on today's volatility [6][7] - Near-term market stimuli have a more significant impact on stock performance compared to older stimuli, which is a fundamental concept in financial data science [7]

Core Insights - The fintech landscape in 2025 is dynamic, with PayPal and Upstart leading in digital payments and AI-driven lending respectively [1][2] PayPal Overview - PayPal is expanding its ecosystem through strategic partnerships, new payment features, and increased adoption of Venmo, with Venmo revenues rising over 20% and total payment volumes growing 12% [4][6] - The company is integrating AI-driven commerce tools through collaborations with Google, Salesforce, and Anthropic, and is positioning itself for emerging digital commerce trends with the PYUSD stablecoin and crypto payment options [5][6] - PayPal's BNPL partnership with Blue Owl Capital and holiday promotions offering 5% cashback illustrate its innovative approach to boosting transaction volume [6] Upstart Overview - Upstart's AI-powered lending platform has led to significant revenue growth, with Q2 2025 revenues reaching $257 million, more than double year-over-year, and loan originations at $2.8 billion, the highest in three years [7][8] - The company returned to GAAP profitability with $5.6 million in net income, compared to a $54.5 million loss in the prior year, and contribution profit rose 85% to $141 million [8][9] - Upstart is diversifying beyond personal loans, with auto originations growing sixfold and home segment nearly ninefold, representing over 10% of total loan volume [9][10] Financial Estimates - The Zacks Consensus Estimate for PayPal's 2025 sales and EPS implies year-over-year increases of 3.92% and 12.47% respectively, with EPS estimates trending upward [12] - Upstart's 2025 sales are expected to rise by 51.36%, although EPS estimates for 2025 and 2026 have been revised downward [13] Valuation Comparison - PayPal shares are trading at a low valuation with a Value Score of A, while Upstart shares are considered overvalued with a Value Score of F [16] - PayPal's forward Price/Sales ratio is 1.91X, below its three-year median of 2.16X, while Upstart's is 3.98X, also below its three-year median of 4.08X [16] Performance Analysis - Over the past six months, Upstart shares have outperformed PayPal, which has underperformed the S&P 500 composite [17] Conclusion - PayPal combines scale, diversified products, and strong user engagement, making it a more reliable choice for investors seeking lower volatility [21][22] - Upstart's rapid growth in AI-driven lending is notable, but its exposure to credit-sensitive borrowers introduces volatility [20][22]

Core Insights - Upstart is positioned as a potential high-growth stock, leveraging its innovative AI-driven credit assessment technology to disrupt traditional credit reporting and scoring models [2][10][14] Company Overview - Upstart operates as a modern credit-reporting bureau, similar to established firms like Equifax, TransUnion, and Experian, while also incorporating credit-scoring capabilities akin to Fair Isaac's FICO model [3][4] - The company utilizes an AI algorithm developed by co-founder Paul Gu, which evaluates over 2,500 unique variables to provide a more comprehensive assessment of creditworthiness [5][6] Technology and Performance - Upstart's platform allows for 43% more loan approvals without additional defaults compared to traditional credit scoring methods, with over 90% of loan approvals being automated [7] - The adoption of Upstart's technology has increased significantly, with over 100 banks now utilizing its services, up from fewer than 60 in early 2022 [9] Financial Growth - Upstart has experienced consistent revenue growth, achieving profitability in Q2 of this year, with projected earnings per share increasing from $1.65 this year to $2.49 next year [10][15] - The total loans originated by Upstart in the previous year amounted to 697,092, valued at $5.9 billion, which is a small fraction of the overall U.S. loan market [11] Market Opportunity - The U.S. digital lending market is expected to grow at an annualized rate of over 13% through 2030, presenting a significant opportunity for Upstart to capture market share [12][13] - Despite current investor skepticism, analysts maintain a positive outlook, with an average one-year price target of $77.57, indicating a potential upside of nearly 60% from the current stock price of $48.58 [16]

Core Viewpoint - The article emphasizes the importance of identifying undervalued stocks that are mispriced by the market as a strategy to position oneself effectively for the start of Q4 [1]. Summary by Relevant Sections - **Investment Strategy**: The article suggests that investors should focus on undervalued stocks to capitalize on potential market mispricing as Q4 approaches [1].

Core Viewpoint - Upstart Holdings, Inc. is set to report earnings on November 4, 2025, with significant anticipated growth in EPS and revenue compared to the previous year [2][3]. Group 1: Stock Performance - Upstart Holdings, Inc. closed at $52.37, reflecting a +1.18% change from the previous day, outperforming the S&P 500, which fell by 0.28% [1]. - The stock has decreased by 17.08% over the past month, underperforming the Finance sector's gain of 0.87% and the S&P 500's gain of 4.03% [1]. Group 2: Earnings Expectations - The upcoming earnings report is expected to show an EPS of $0.42, representing an 800% increase year-over-year [2]. - Revenue is projected to reach $281.02 million, indicating a 73.32% increase compared to the same quarter last year [2]. Group 3: Full Year Projections - For the full year, earnings are estimated at $1.66 per share, reflecting a +930% change from the previous year [3]. - Revenue for the full year is projected at $963.44 million, showing a +51.36% increase from the prior year [3]. Group 4: Analyst Forecasts - Recent revisions to analyst forecasts for Upstart Holdings, Inc. are crucial as they indicate changing business trends and analysts' confidence in performance [4]. - Positive revisions in estimates are associated with potential stock price performance [5]. Group 5: Valuation Metrics - Upstart Holdings, Inc. has a Forward P/E ratio of 31.18, significantly higher than the industry average of 12.1, suggesting it is trading at a premium [7]. - The Financial - Miscellaneous Services industry, part of the Finance sector, holds a Zacks Industry Rank of 90, placing it in the top 37% of over 250 industries [7]. Group 6: Zacks Rank System - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), has a strong historical performance, with 1 rated stocks averaging a +25% annual return since 1988 [6]. - Upstart Holdings, Inc. currently holds a Zacks Rank of 3 (Hold), indicating a neutral outlook [6].

Core Insights - Upstart Holdings (UPST) has experienced significant volatility, with a 34.5% decline in stock price over the past three months despite a strong first half of 2025, raising concerns about the credit landscape [1][8][17] Financial Performance - In Q2 2025, Upstart's revenues more than doubled year-over-year to $257 million, and loan originations surged to $2.8 billion, marking the highest volume in three years [5][8] - The company achieved GAAP profitability a quarter earlier than expected, reporting a net income of $5.6 million compared to a loss of $54.5 million a year ago, with contribution profit rising 85% to $141 million [6][8] - Management has guided for full-year 2025 revenues of approximately $1.05 billion and net income of $35 million, indicating a sustainable turnaround [7] Market Position and Competition - Upstart has underperformed compared to peers like LendingClub and Enova International during the recent downturn [3] - The company is expanding its lending portfolio beyond personal loans, with auto loan originations increasing over sixfold and home segment growth nearly ninefold, contributing over 10% to total volume [9] Technological Edge - Upstart's AI-driven credit underwriting model, Model 22, has improved separation accuracy by 17 percentage points compared to traditional models, enhancing conversion rates and reducing acquisition costs [11] - Automation remains a key advantage, with 92% of loans in Q2 being fully automated, allowing for faster approvals and lower interest rates [12] Valuation and Estimates - Recent estimate revisions indicate a downward trend for EPS estimates for 2025 and 2026, although year-over-year increases are still expected [13] - Upstart shares are currently trading at a forward Price/Sales (P/S) ratio of 4.08, above the industry average of 3.91, and at a premium compared to LendingClub and Enova International [15][16] Strategic Partnerships - Recent partnerships with credit unions reflect growing confidence in Upstart's AI platform, providing stable funding sources and expanding its reach into community-based lending networks [10]