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]

Group 1: Upstart Holdings Inc. - Upstart operates an AI-driven lending platform that enhances credit risk assessment compared to traditional FICO models, with its success closely tied to loan approvals and interest rate conditions [2][4] - The company reported a 33% earnings-per-share (EPS) beat in Q2 2025, with EPS at 36 cents against a consensus of 27 cents, indicating a disconnect between its strong performance and current stock price [4][5] - Analysts maintain a consensus price target of $81.08 for Upstart, suggesting a potential upside of 56% from current prices [5] Group 2: Affirm Holdings Inc. - Affirm operates on a floating-rate basis, allowing it to benefit more quickly from interest rate cuts compared to Upstart, with a current price forecast of $82.04, indicating an 8.4% upside [6][7] - The company specializes in Buy Now Pay Later (BNPL) financing, with over 25% of users utilizing the service for essential purchases, reflecting tight consumer budgets [8] - Despite trading at 74% of its 52-week high, Affirm has a price target of $108 assigned by Mizuho, which is significantly above the analyst consensus [9] Group 3: Rocket Companies Inc. - Rocket Companies is positioned to benefit from a potential surge in refinancing demand as mortgage rates decline, with a current price forecast of $16.88, indicating a downside of 5.04% [10] - The company has seen a 39.4% rally over the past quarter, outperforming the S&P 500 and most mortgage peers, as markets anticipate increased refinancing activity [11] - Bank of America set a price target of $24 for Rocket Companies, suggesting an 18% upside potential above the consensus price target of $16.65 [12]

Core Insights - Upstart is a fintech company leveraging artificial intelligence in the lending sector, acting as a new type of credit bureau [1] - The company has shown significant growth, with a 159% year-over-year increase in loan originations and $257 million in revenue for the second quarter, nearly double from the previous year [2] - Upstart's algorithm has led to a 43% increase in loan approvals, benefiting both lenders and borrowers [2] - The company achieved GAAP profitability a quarter earlier than expected and continues to expand into new areas like auto loans [3] Financial Performance - In Q2, Upstart originated 372,599 loans, reflecting a substantial increase in activity [2] - Revenue reached $257 million, indicating strong financial performance compared to the previous year [2] - The forward-looking price-to-earnings (P/E) ratio is currently 27, which is lower than previous years' ratios, suggesting reasonable valuation [3] Valuation Considerations - The price-to-sales ratio stands at 6.1, above the five-year average of 4.4, indicating potential overvaluation [3] - While shares are not considered cheap, they are not excessively overvalued either, making it a potential candidate for long-term investment [4][6] Market Position - Upstart is positioned as an innovative player in the credit bureau space, utilizing AI to enhance the loan facilitation process [6] - The company is not currently listed among the top recommended stocks by analysts, indicating a competitive market landscape [5]

Core Viewpoint - Upstart's shares experienced a significant decline in September due to concerns over rising delinquency rates on its loans, influenced by third-party market research and signs of a weakening economy [1][5]. Group 1: Stock Performance - By the end of September, Upstart's stock had fallen 31%, with most of the decline occurring towards the end of the month [3]. - The stock's worst day was on September 10, when it dropped 9.4% following the bankruptcy of Tricolor Holdings, a used-car dealer that lends to borrowers with no credit [6]. - After a brief recovery due to the Federal Reserve's rate cut on September 17, the stock began to slide again as credit concerns resurfaced, culminating in an 8% drop on September 29 after a note from BTIG regarding increased delinquencies [7]. Group 2: Market Context - The sell-off in Upstart's stock was primarily driven by a deteriorating credit picture for low-income Americans, which is a core market for the company [5]. - Other fintech stocks, particularly in the Buy Now Pay Later (BNPL) sector, also experienced declines due to rising credit risk concerns [2]. - The bankruptcy of Tricolor Holdings, although not directly connected to Upstart, negatively impacted credit markets and contributed to the volatility of Upstart's stock [6]. Group 3: Company Communication - There has been no direct communication from Upstart regarding the impact of changing credit markets on its business, despite management's participation in a Goldman Sachs conference on September 9 [8].

Core Insights - Growth stocks are currently leading the market, with the S&P 500 up 14% and the Nasdaq-100 up 17% this year [2] - Three notable growth stocks to consider are Shopify, On, and Upstart [2] Group 1: Shopify - Shopify is a significant player in e-commerce, providing services rather than selling products directly to consumers [3] - The company holds over 12% market share in U.S. e-commerce, positioning itself as a competitor to Amazon [4] - E-commerce growth offers organic opportunities for Shopify, with international sales tripling since 2020 [5][6] - In Q2, Shopify's revenue grew 31% year-over-year, and operating income increased by 21% with a 9% margin [7] - Shopify's stock has risen 77% over the past year, indicating strong market confidence [7] Group 2: On - On is a rising brand in athletic wear with significant growth potential due to low brand penetration globally [8] - In Q2, total sales increased by 38% year-over-year, with apparel sales up 76% and accessories up 143% [9][10] - The company has doubled its brand penetration in the U.S. over the past year and maintains the highest gross margin in the industry at 61.5% [10] - On is expanding its product line and has engaged in successful collaborations, indicating a bright future [11] Group 3: Upstart - Upstart operates an AI-driven lending platform that assesses credit risk using extensive data, aiming to approve more loans without increasing risk [12] - The company reported over 100% revenue growth in Q2 and achieved its first net profit since 2022, with a GAAP net income of $5.6 million [13] - Upstart's stock is currently trading at a price-to-sales ratio of 6 and a forward P/E ratio of 23, suggesting an attractive valuation [13] - The company is better positioned now to navigate economic challenges and is launching more products for growth opportunities [14]