UpStart Holdings Inc (UPST)

[eastunder]

Morgan Stanley nailed its coffin

Upstart's Capital Arrangements Might Be Promising But Concerns Around Annualized Losses Continue, Morgan Stanley Says

11:59 AM EDT, 08/08/2023 (MT Newswires) -- Upstart Holdings' (UPST) committed capital arrangements might work to diminish notional funding concerns but still lack clarity around their underlying economics, Morgan Stanley said in a note Monday.

Concerns around the rapid inflection in monthly annualized loss rates still remain, the analysts said, adding that they recommend investors fade what appears to be a low-quality rally.

The analysts said that while the sequential improvement in delinquencies from June to July is a slight positive, the rapid rise in delinquencies since H2 2022 has translated to record annualized loss rates -- July's stood at 23.9%, which represents 541 basis points of deterioration month-over-month and 1225 bps of deterioration year-over-year.

"We are concerned about the rapid inflection in monthly annualized loss rates, which should drive higher APR pricing and reduce borrower demand, especially in an environment where inflation is normalizing, and employment remains durable," the analysts said.

The analysts added that while several investors think that the purchase deal Castlelake struck with Upstart for up to $4 billion of loan purchases matches the two-year duration of Upstart, some lenders are pulling back.

The impact of the committed capital arrangements on Upstart's economics remains a key area of focus, the analysts said, adding that loss-sharing and/or modest take rate degradation remain the two most likely outcomes.

Morgan Stanley is maintaining its underweight rating on the stock with a $13 price target.

The company is set to report Q2 results on Tuesday after market close.

Price: 51.79, Change: -0.18, Percent Change: -0.35

[eastunder]

Absolutely!

[lvhd]

Nice run to 70 from 12. $41 now

[eastunder]

Yes, but Guidance rules the roost.

[OptimusPrime555]

POS back to $12!!!

ROFLMAO

[lvhd]

Similar pump like a penny stock.
Earnings will tell the true

[eastunder]

That's because It's not an otc penny stock. ;)

[starman2]

Ihub must be dead if there's like 4 people here.. my god

[Monksdream]

Upstart Holdings Inc NASDAQ: UPST

GoSymbol lookup
Financials : Consumer Finance | Small Cap BlendCompany profile
Upstart Holdings, Inc. is a cloud-based artificial intelligence (AI) lending marketplace. The Company’s platform aggregates consumer demand for loans and connects it to its network of Upstart AI-enabled bank and credit union partners. Its AI models are provided to bank partners within a consumer-facing cloud application that streamlines the end-to-end process of originating and servicing a loan. It has built a configurable, multi-tenant cloud application designed to integrate seamlessly into a bank’s existing technology systems. Its configurable platform allows each bank to define its own credit policy and determine the parameters of its lending program. The AI models use and analyze data from all of its bank partners. Its consumers can discover Upstart-powered loans in one of two ways: either through Upstart.com or through a bank-branded product on its bank partners’ own Websites. It also has investments in Upstart Auto Retail, a front-end software-as-a-service application.

[eastunder]

Kudos on your buys and sells! I wasn't even aware of UPST on that first move up.

The Darvos box I am not familiar with - so thank you for making me look that up! ;) That is VERY interesting to me. Marketsmith comes thru IBD - so very familiar with IBD and the thought patterns behind that.

I started tracking a list I made of High flyers that dropped more than 50% and UPST, as well as some others, made it on to that list I tracked. I started doing that around 3/18/22, and I watched them all drop even lower. Stocks I couldn't build into before, became stocks I could finally afford and start patiently buying.

UPST's final # look like this.

UPST
$401.49 H on10/15/21
50% drop # @ $200.745
$11.93 L on 5/3/23 (-97.02% off of High)

That means the 11.93 low to 64.45 current high it hit today is a 440% move in 57 days.

Thats an impressive move.

So you sold into this move, did I read that right?

so I held until today when it exploded.

Will you follow the Darvos box for re entry?

[pauljack13]

Great article. It looks like somebody did buy the bad loans.

[eastunder]

1 Unstoppable Stock Down 85% You'll Regret Not Buying on the Dip
By Anthony Di Pizio – Jul 25, 2023 at 6:10AM

(This feels a little pumpish ...but it also has some info in it I was unaware of.)

https://finance.yahoo.com/m/705b9915-0fbd-3672-ba01-67941926c8f4/1-unstoppable-stock-down-85%25.html

KEY POINTS
Shares of Upstart have traded as high as $401 and as low as $12 over the last three years.
Investors were excited by the company's AI-driven lending models in 2021, before concern set in last year.But Upstart's models, and its business, appear to be holding up well, leading to a surge in its stock in 2023.

Shares of Upstart have surged some 350% in 2023, but there could be more upside ahead.
Shares of Upstart (UPST 16.96%) are sitting on a whopping gain of 353% in 2023, yet they are still trading 85% below their all-time high. How is that possible?

(It was making money then and now it's not? )

The stock listed publicly in 2020 at $20, surged as high as $401 in 2021, and then collapsed to a low around $12 late last year. Therefore, its 2023 return has come off an extremely low base relative to where the stock has traded previously.

You might be wondering what triggered that roller-coaster ride in the span of just three years. I'll tell you -- and explain why Upstart stock might be a buy now.

(Please do)

Upstart is disrupting the lending business

Upstart is an artificial intelligence (AI) software company focused on helping banks and financial institutions measure the creditworthiness of potential borrowers more accurately. It's no easy task; the company is up against Fair Isaac's FICO credit scoring system, which has been entrenched in the banking industry for more than three decades.

Unhooking lenders from the comfort of what they know is a real challenge, but Upstart's proposition is attractive. Its AI models can assess 1,600 different data points on a borrower so quickly that 84% of approvals are instant and fully automated, with no human intervention.

By comparison, FICO looks at just five core data points, and it can take a human assessor days or even weeks to come to an approval decision.

At the height of the poandemic during 2020 and 2021, interest rates were adjusted to record lows and the U.S. government flooded the economy with stimulus money. Consumers took full advantage and went on a borrowing binge.

Upstart processed a record number of loan originations, and its revenue more than tripled year over year in 2021. Its stock price followed along and hit an all-time high of $401.

But the tide turned in 2022 when those conditions reversed. Surging inflation forced the Federal Reserve to embark on the most aggressive campaign to hike interest rates in its history, and investors grew concerned that Upstart's AI models hadn't been battle tested in such a harsh economic environment.

All the while, consumer demand for credit plunged, which caused Upstart's revenue growth to flatten out.

It triggered a collapse in the stock price, sending shares as low as $12. But investors weren't the only ones panicking; Upstart's funding sources dried up, forcing the company to absorb some loans on its own balance sheet. That added a whole new dimension of risk to the business.

But Upstart is almost out of the woods

The company embarked on a mission to prove its AI models were holding up just fine. It has published a series of data points over the past year showing they're still significantly more accurate than traditional methods of assessment.

In summary, 53% fewer Upstart loans end in default compared to loans assessed by the big banks. That means Upstart's AI can write 173% more loans at the exact same default rate.

Those figures are likely to improve over time because the company continues to train its models on data generated from 90,000 new loan repayments each day. AI algorithms are like living neural networks: When those borrowers either make their repayments or default, Upstart's models learn and adjust accordingly as risks evolve.

That has profound social impacts, too. Upstart's algorithm approves 43% more Black borrowers and 46% more Hispanic borrowers than traditional methods of assessment. Plus, it approves them at a significantly lower interest rate. Not only is that great for those consumers, but it also creates an opportunity for Upstart's funding partners to access new markets that previously fell through the cracks.

This has culminated in a series of wins for the company in 2023. First, it had 99 total funding partners in the first quarter (ended March 31), which was almost double the number it had a year ago. Some of those partners committed more than $2 billion in funding, which will ensure Upstart won't have to put its balance sheet at risk again.

Second, in May, an investment fund called Castlelake agreed to buy $4 billion worth of Upstart consumer loans in a massive vote of confidence.

Why Upstart stock is a buy now

Buying a stock after it plunges 85% from its all-time high is never easy. But Upstart has stabilized its business and is in a great position to capitalize when consumers' demand for credit eventually reignites.

On that note, the company is eyeing a series of lucrative long-term opportunities. Right now, it operates in the personal loan and auto loan segments, which see about $946 billion in originations each year. For context, Upstart has originated only $32 billion loans in its history, so it hasn't even scratched the surface of those addressable markets.

But it gets better. Upstart has highlighted a $644 billion annual opportunity in small-business loans and a whopping $2.7 trillion annual opportunity in the mortgage market. The company hasn't entered either segment, but doing so would quadruple its current addressable opportunity.

Wall Street analysts expect Upstart to deliver $549 million in revenue in 2023, which would be a 34% drop compared to 2022. But the company's recent growth struggles might end there, because the Street predicts revenue will bounce back 41% to $773 million in 2024.

Considering Upstart's lending models have just proved their durability in one of the worst interest-rate shocks in history, the company could be poised for growth long into the future. That makes the 85% discount in its stock price an attractive risk-reward proposition.

[pauljack13]

I know they got 2 billion in financing and that helped them with bad loans.
I made money on this on the way up the first time. I sold way before it hit 400.

This time it ended up on somebody’s list I follow, who usually use the Darvas / IBD / Stan Weinstein methodology. After it bottomed and then moved it’s way up to 20 I followed his advice and bought. I sold at 32. Then I bought again around 35 and sold at 42. This time I saw it consolidating after it hit a high near 60. It seemed like a Darvas Box was forming. I bought at 56.50, not exactly following the rules, it never hit the bottom of my box so I held until today when it exploded.

This seems to be in a stage 2 base, in an uptrend. This is the 3rd consolidation but I’m just following the momentum.

[eastunder]

UPST Current pps @ $63.05
Today's Change at time of post $9.41(+17.54%)

Today's Volume12.7M Above Avg @ 10:15 am (MTN time)

Gap Down 5/10/22 at 76.23 to 38.47
Earnings driven Gap down.

Trend Analysis
UPST appears to be in a strong bullish trend. Its 200-day moving average is upwards sloping and the MACD histogram is above 0. Comparative Relative Strength analysis shows that this issue is outperforming the S&P 500.
As of 12:12 PM ET Tuesday, 07/25/2023

Momentum
Momentum for UPST is strongly bullish. The 14-period Slow Stochastic oscillator is above 80, the level which many analysts call overbought. This means that investors have been actively purchasing shares and driving the price higher.
As of 12:12 PM ET Tuesday, 07/25/2023

Volume
The last 10-days have seen significant volume in UPST, with average daily volume above the average for the last year. Today's volume is no exception; with 12,717,026 shares having been traded already. The On Balance Volume indicator (OBV) is bullish. The slope of the indicator is positive and suggests that buyers are presently more active than sellers.

Volatility
Bollinger Bands® use standard deviation of the closing price around a moving average to measure volatility. The Bollinger Bands® are presently wider than usual, as a result of greater than normal volatility that accompanied the recent price move. Events such as this may precede a pause or reversal in the near term trend.
As of 12:12 PM ET Tuesday, 07/25/2023

[TheFinalCD]

LOL

[eastunder]

I'll see if I can find it too. I sit here all day long watching my stocks move up and down - so it gives me something to do. ;)

I'm not sure how that will fit into the whole picture though.

If we are talking fundamentals

Sept 2022 they turned negative in EPS and two more quarters followed that with losses as well. (Dec and March)

Sales dropped from 310.10 to 102.9 in the last 5 q's. So struggling quite a bit? (I use marketsmith - so it's all in front of me)

I feel like the market is anticipating growth further down the road, indicative of the upgrade, right? But this also could be something more simple? The shorts? If they come in positive - that would be a boost. This stock is (or was) Heavily, heavily shorted.

Funny thing is - I tracked Upst for a long period and bought it at 37, 27 and 13 (I build into positions and buy on the way down)

The goal was just to trade it. Get a good gain and move on.

I always sell my highest shares first - after they go green. Sell the lowers as they move up but I still own the 27's and the 13's... and I'll be honest with you - I am kinda fond of it right now. ;) It is a pleasant surprise. I do tend to wimp out on earnings day. I go into protective mode and normally take some off the table.

That's probably too much info. LOL But How are you working UPST? Game plan in action?

[pauljack13]

I have to admit I didn’t really do the research but one of the guys a follow, named Professor Money said it. I’ll try to look it up.

[eastunder]

Guess I wasn't paying attention in class that day. Was that in the last report? I'll have to look for that. Thanks!

[pauljack13]

We’re in gap fill territory. If this can break up a little more we could fill a gap to 90. IMO

[pauljack13]

They got rid of 2 billion dollars of their bad loans. They wiped them clean

[eastunder]

Nuts. But I'm happy about it.

Fundamentally UPST is a train wreck. So, to see a price target being raised from 42 to 72 is a bit baffling.

[pauljack13]

UPST. Here we go. Approaching 52wk highs

[eastunder]

BTIG Raises Upstart Holdings' Price Target to $72 From $42, Keeps Buy Rating

09:40 AM EDT, 07/25/2023 (MT Newswires) -- Upstart Holdings (UPST) has an average rating of underperform and price targets ranging from $6 to $72, according to analysts polled by Capital IQ.

Price: 56.31, Change: +2.67, Percent Change: +4.98

[lvhd]

This company is loosing money. It’s a P&D IMO

[pauljack13]

I know what you mean. Getting a bad entry sucks.

I see UPST at 100 to 150 by the end of the year. GLTU

[gail]

maybe, but i simply got …

…

in too high, i should have waited is all, hopped back out , but watching it for now.

[pauljack13]

I mean $UPST.


Dumb mistake

[pauljack13]

This stock has got a lot of room to move. I think it’s just consolidating, getting ready for it’s next leg upwards. JMO

$SMCI

[gail]

yup, should have waited, oh well, next.

[gail]

huge buys now, and moving up eod here.

[gail]

it’s fighting against that current of …

…

manipulation but its trying to go back up to new highs now.


lets do this!!

[gail]

should have waited a tad longer to buy, lol

[gail]

Upstart to Report Second Quarter 2023 Earnings on August 8, 2023

4:30 PM ET, 07/12/2023 - Business Wire

SAN MATEO, Calif.--(BUSINESS WIRE)--Jul. 12, 2023--Upstart Holdings, Inc. (NASDAQ: UPST), a leading artificial intelligence (AI) lending marketplace, announced today that its second quarter fiscal year 2023 business and financial results will be released on Tuesday, August 8, 2023 after the market close. Upstart will host a conference call and live webcast that day at 1:30 p.m. PT / 4:30 p.m. ET. Prior to the conference call, the second quarter 2023 earnings press release and investor presentation will be available on Upstart’s investor relations website at ir.upstart.com.

Live webcast. The live webcast will be accessible on Upstart’s investor relations website, ir.upstart.com, and an archived webcast of the conference call will be available after the conference call.

Conference Call Dial In. To access the live conference call in the United States and Canada: [phone], conference code 2527927. To access the live conference call outside of the United States and Canada: [phone], conference code 2527927.

[eastunder]

What do you think is coming in August?

[gail]

no, i dont know much about…..

..

that stuff, but i like what is coming here in aug.

[eastunder]

I do know this move is certainly surprising a lot of shorts. Do you have access to current short numbers?

All I have is this but not sure of the accuracy.

https://shortsqueeze.com/?symbol=upst&submit=Short+Quote%99

[gail]

seems it will keep going and then we see what they say on aug 8. im assuming its good.

[eastunder]

Hey Gail!

It was just at 12 bucks in May.

Been a good run already.

[gail]

hopped in today. looking forward to aug 8 fins.

[eastunder]

Upstart to Report Second Quarter 2023 Earnings on August 8, 2023

4:30 PM ET, 07/12/2023 - Business Wire

SAN MATEO, Calif.--(BUSINESS WIRE)--Jul. 12, 2023--Upstart Holdings, Inc. (NASDAQ: UPST), a leading artificial intelligence (AI) lending marketplace, announced today that its second quarter fiscal year 2023 business and financial results will be released on Tuesday, August 8, 2023 after the market close. Upstart will host a conference call and live webcast that day at 1:30 p.m. PT / 4:30 p.m. ET. Prior to the conference call, the second quarter 2023 earnings press release and investor presentation will be available on Upstart’s investor relations website at ir.upstart.com.

Live webcast. The live webcast will be accessible on Upstart’s investor relations website, ir.upstart.com, and an archived webcast of the conference call will be available after the conference call.

Conference Call Dial In. To access the live conference call in the United States and Canada: [phone], conference code 2527927. To access the live conference call outside of the United States and Canada: [phone], conference code 2527927.

About Upstart

Upstart is a leading AI lending marketplace partnering with banks and credit unions to expand access to affordable credit. By leveraging Upstart’s AI platform, Upstart-powered banks and credit unions can have higher approval rates and lower loss rates for every race, ethnicity, age, and gender, while simultaneously delivering the exceptional digital-first lending experience their customers demand. More than two-thirds of Upstart loans are approved instantly and are fully automated. Upstart was founded by ex-Googlers in 2012 and is based in San Mateo, California and Columbus, Ohio.

[bhulkupk]

I am wondering the same as well

[Monksdream]

Professional money likes it

[eastunder]

What lit that fire?

Super nice day!

[Monksdream]

UPST new 52/week high

[eastunder]

And It's still highly shorted, I believe.

[Monksdream]

UPST new 52 week high

[eastunder]

None of These Wall Street Analysts Recommend Buying This AI Stock -- They Might Be Wrong
By Anthony Di Pizio – Jun 8, 2023 at 7:59AM

https://finance.yahoo.com/m/85a21b57-6039-328b-9283-ad59156dbd72/none-of-these-wall-street.html

KEY POINTS
Upstart stock peaked in late 2021, right before rising inflation and interest rates disrupted the U.S. economy.
The stock plunged 97% from its all-time high, and Wall Street remains bearish.
But Upstart stock has had a monster gain in 2023, and many of the issues with its business are gradually resolving.


NASDAQ: UPST
Upstart
Upstart Stock Quote
Market Cap $2B
Today's Change (14.93%) $4.26
Current Price $32.80
Price as of June 8, 2023, 1:58 p.m. ET

Wall Street is bearish on Upstart stock, but it's surging this year anyway.

When the professionals on Wall Street reach a consensus about whether to buy or sell a stock, it pays to listen more often than not. But in at least one case this year, following the herd of analysts might have resulted in selling Upstart (UPST 14.93%) stock right before it made a major move higher.

Upstart has been swept up in the artificial intelligence (AI) frenzy in 2023, which appears to have caught Wall Street off guard. The majority of analysts tracked by The Wall Street Journal still recommend selling the stock, but here's why they might continue to be wrong.

Upstart is disrupting traditional lending

For the past 34 years, when a consumer applies for a loan from a bank, their creditworthiness has been measured by Fair Isaac's FICO scoring system. FICO takes into account five key factors, including a potential borrower's repayment history and how much money they still owe to other lenders.

But Upstart says FICO is outdated because its scope is too narrow, and it overlooks too many quality applicants -- particularly those in minority demographics. Upstart uses artificial intelligence (AI) to instead analyze over 1,600 data points on a potential borrower, which includes their employment history, level of education, and even where they live.

According to an internal study, loans originated by Upstart's algorithm result in 53% fewer defaults at the same approval rate as loans assessed the traditional way. Also, Upstart approves a whopping 173% more loans at the same default rate -- this implies banks are rejecting a lot of worthy borrowers.

Plus, since Upstart's technology is powered by AI, it's capable of analyzing data rapidly to make fully automated, instant approval decisions 84% of the time.

Upstart's business model is simple: It doesn't lend any money itself, but rather it originates loans for its bank, credit union, and car dealership partners, and it gets paid a fee for doing so. The upside for the lender is that Upstart's algorithm is faster and more accurate than traditional, human assessment methods, which would take weeks to analyze the same amount of data.

But Upstart is coming off a miserable 18-month period

Upstart was founded in 2012, which means it had operated exclusively in stable economic times up until the pandemic period from 2020 on. Its stock price marched higher until the second half of 2021, when it hit an all-time high of $401, but investors grew concerned when inflation began to spike, ending the period of ultra-low interest rates in the U.S.

That sent ripple effects throughout the economy, with demand for consumer credit plunging. Additionally, all of a sudden, Upstart was struggling to find buyers for the loans it was originating. Institutions adopted a "wait and see" approach when it came to the company's algorithm, because defaults began to climb, and they weren't sure if the loans would continue to perform in line with the modeled outcomes.

Upstart wound up absorbing a number of loans using its own balance sheet, which added credit risk to the company -- something investors did not sign up for -- and sent its stock to a low of $11.93.

Fortunately, as time went on, Upstart released lots of data proving its AI-powered approach is up to the task, no matter the economic environment. As of the first quarter of 2023, the company had a record-high 99 lending partners, which was almost double the number it had a year ago. That signals renewed confidence.

Plus, Upstart recently announced some of those partners pledged $2 billion in new funding to help the company weather any future speed bumps, where it might struggle to find immediate buyers for its loans.


Wall Street might be wrong to recommend selling Upstart stock

The Wall Street Journal tracks 15 analysts covering Upstart stock. Four recommend holding, three are in the underweight (bearish) camp, and the remaining eight have given it the lowest-possible sell rating. Not a single analyst recommends buying. That's little changed from three months ago.

Their average price target is $12.61. But here's the problem: Upstart stock has surged 120% in 2023 so far and currently trades at about $29! That means, had investors listened to Wall Street on this occasion, they would've missed a really nice gain.

Given the challenging economic climate, analysts don't expect loan demand to recover this year. They estimate Upstart's revenue could come in at $548 million for 2023, which would be a 34% drop compared to 2022, though they do expect a return to growth in 2024.

But this is a long-term story, and now that the company is on a more stable footing, this could be a great time for investors to buy in. AI is infiltrating so many industries right now, and it's almost inevitable it will make an impact on lending. For all of its early challenges, Upstart thinks it has a $4 trillion opportunity in the markets for personal loans, automotive loans, business loans, and mortgages.

Since the company is valued at just $2.4 billion today, the risk-reward proposition presented by Upstart stock sure looks attractive, irrespective of Wall Street's opinion.

[bwrbad]

UPST - like this one but don't understand why the two Indian executives -particularly the CFO Sanjay Datta selling so many millions of shares every month when retail looking for support from insiders. Something very wrong with this company. too much debt could be an indication why insiders don't trust and taking all they can get free.

[TheFinalCD]

WHAT A BEAST #CONGRAT$

[eastunder]

Cha ching!

That's a huge move for UPST. 25%

Nice day!