Upstart(US:UPST) The Motley Fool·2025-10-24 08:07Core Viewpoint - Upstart Holdings has experienced a 27% decline in stock price over the past 30 days, presenting a potential buying opportunity for investors as the company prepares to release its third-quarter results on November 4, 2025 [1][3]. Company Overview - Upstart has developed an AI algorithm for credit assessments that analyzes over 2,500 data points, significantly more than traditional methods, leading to faster approvals and a better customer experience [5][6]. - The company primarily focuses on unsecured personal loans but is expanding into automotive and home equity line of credit (HELOC) segments [7]. Financial Performance - In the second quarter of 2025, Upstart originated 372,599 loans, a 159% increase year-over-year, with a total dollar value of $2.8 billion, marking a three-year high [7]. - Revenue for the second quarter surged by 102% year-over-year to $257 million, prompting management to raise the full-year revenue forecast to $1.055 billion for 2025, which would be the first time it crosses the billion-dollar mark [10][11]. - The company reported a net income of $5.6 million during the second quarter, indicating it is on track for its first profitable year since 2021 [12]. Market Position and Valuation - Upstart's algorithm has shown resilience during challenging market conditions, and it recently secured a new regional bank client [13][14]. - The stock is currently trading at a price-to-sales (P/S) ratio of 5.6, which is a 50% discount to its historical average of 11.1 since its IPO in 2020 [14]. - To maintain its current P/S ratio, Upstart's stock would need to rise by 55% by the end of next year, indicating a compelling risk-reward scenario for investors [17].