Core Insights - Upstart Holdings, Inc. (UPST) closed at $48.22, reflecting a -1.4% change from the previous day, underperforming the S&P 500 which gained 0.32% [1] - Over the past month, UPST shares have appreciated by 17.08%, significantly outperforming the Finance sector's gain of 5.94% and the S&P 500's gain of 4.7% [1] Earnings Performance - Upstart Holdings is expected to report an EPS of $0.47, representing an 80.77% increase from the same quarter last year [2] - The consensus estimate for revenue is projected at $288.47 million, indicating a 31.74% rise from the equivalent quarter last year [2] Full-Year Estimates - Zacks Consensus Estimates forecast earnings of $1.68 per share and revenue of $1.04 billion for the full year, reflecting year-over-year changes of +940% and +62.77%, respectively [3] Analyst Estimates - Changes in analyst estimates for Upstart Holdings are crucial as they often reflect shifts in short-term business dynamics, with positive adjustments indicating a favorable outlook on business health and profitability [4] Zacks Rank - Upstart Holdings currently holds a Zacks Rank of 3 (Hold), with the Zacks Consensus EPS estimate remaining unchanged over the past month [6] - The Zacks Rank system has shown that 1 ranked stocks yield an average annual return of +25% since 1988 [6] Valuation Metrics - Upstart Holdings has a Forward P/E ratio of 29.2, which is a premium compared to its industry's Forward P/E of 12.31 [7] - The Financial - Miscellaneous Services industry, part of the Finance sector, holds a Zacks Industry Rank of 100, placing it in the top 41% of over 250 industries [7]

Core Insights - Upstart has formed partnerships with Tech CU, Peak Credit Union, and CAFCU to enhance its lending offerings, including personal loans and auto refinance loans [2][4][10] - The company has surpassed 100 lending partners, with its top three partners originating 85% of transaction volume and contributing 63% of total revenue [5][6][10] - Upstart's shares have seen a decline of 19.5% over the past three months, underperforming the broader industry and the S&P 500 [9] Partnership Developments - Tech CU began offering personal loans through Upstart's Referral Network in September 2025, with plans to expand into auto refinance loans in early 2026 [2] - Peak Credit Union and CAFCU have adopted Upstart's AI platform for personal loans, auto refinancing, and HELOCs, indicating growing confidence in Upstart's technology [4] Market Position and Performance - Upstart's proprietary AI lending marketplace allows lending partners to originate credit, improving consumer access to affordable credit [6] - As of September 30, 2025, Upstart had over 100 lending partners, with expectations for continued expansion [5][10] Financial Metrics - Upstart's current valuation shows a Price/Sales ratio of 3.97X, which is above the industry average of 3.36X, indicating that shares may be overvalued [11] - The Zacks Consensus Estimate for full-year 2025 EPS has been revised slightly upward, suggesting significant year-over-year increases [12]

Company Overview - Upstart Holdings, Inc. (NASDAQ:UPST) is a fintech firm founded in 2012 that has originated approximately $48 billion in loans, representing a small share of the overall lending market [2] - The company partners with over 100 banks and credit unions, offering personal loans, auto refinancing, and home equity lines of credit, which together represent a multi-trillion-dollar opportunity [2] Innovation and Technology - A key innovation of Upstart is the use of artificial intelligence to replace traditional FICO credit scoring, analyzing more than 2,500 borrower variables to better assess credit risk and reduce defaults [2] Recent Developments - In early November, Upstart announced a new 12-month forward-flow agreement with alternative investment firm Castlelake, under which Castlelake has agreed to purchase up to $1.5 billion in consumer loans originated on the Upstart platform [3] - This agreement marks the third deal between Upstart and Castlelake, following earlier purchase agreements of $4 billion and $1.2 billion [3] Market Position - Upstart operates a cloud-based AI lending platform in the United States, positioning itself within a rapidly evolving fintech landscape [3]

Core Insights - Upstart Holdings (UPST) shares are trading at a premium with a Value Score of D, and a forward 12-month Price/Sales (P/S) ratio of 3.83X, higher than the industry average of 3.36X [1] - Despite the premium valuation, UPST shares have underperformed, declining 31.1% over the past three months compared to the industry's 14% fall [2] - Investors' confidence is eroding due to macroeconomic conditions and concerns about Upstart's conservative lending models [3] Financial Performance - Upstart reported a 71% year-over-year revenue growth in Q3, reaching $277 million, with loan originations climbing 80% to $2.9 billion [5][9] - Loan applications increased by approximately 30% quarter over quarter, totaling over 2 million, the highest in over three years [8] - The conversion rate for loans decreased to 20.6% from 23.9% in the previous quarter, although it remains above 16.3% from a year ago [8] Operational Efficiency - 91% of loans in Q3 were fully automated, enhancing operational efficiency and scalability [9] - Upstart launched a machine learning model to optimize take rates, which is expected to improve monetization over time [10] Expansion into New Markets - Upstart is diversifying beyond personal loans, with auto, home, and small-dollar loans gaining traction, accounting for nearly 12% of total originations and 22% of new borrowers in Q3 [11] - Auto retail loan originations grew 9% sequentially, and home-equity lending approvals surged to about 20% by October 2025 [12] Market Sentiment and Future Outlook - The Zacks Consensus Estimate for 2025 earnings per share (EPS) has increased by 2 cents to $1.68, while the estimate for 2026 EPS has been revised down by 27 cents to $2.65 [17] - Despite strong fundamentals and growth prospects, the stock remains sensitive to macroeconomic conditions, particularly interest rate shifts [16][18] - Upstart is currently rated as a Hold, suggesting it is a stock worth monitoring rather than an immediate buy or sell [20]

Core Insights - Chime and Upstart are both fintech companies focused on providing financial services to lower-income consumers, with Chime offering fee-free banking and Upstart utilizing AI for loan approvals [1][12] Chime Overview - Chime went public at $27 in June but is currently trading around $24, indicating a decline [2] - Chime's services include fee-free checking and savings accounts, overdraft protection, and a Visa debit card, appealing to lower-income users [4][5] - In 2024, Chime's active members increased by 21% to 8 million, with total revenue rising 31% to $1.67 billion [8] - Despite growth, Chime's purchase volume and average revenue per active member (ARPAM) have shown sequential declines, attributed to macroeconomic pressures [9][10] - Analysts project Chime's revenue to grow by 30% to $2.17 billion in 2025, with adjusted EBITDA turning positive [11] Upstart Overview - Upstart, which acts as a marketplace for loans, has seen its loan originations grow by 28% in 2024, with total revenue increasing by 24% to $636.5 million [15] - The company has benefited from lower interest rates and has automated more of its loan processes, expanding its lending partners [16] - Analysts expect Upstart's revenue and adjusted EBITDA to surge significantly in 2025, driven by favorable interest rate conditions [17] Comparative Analysis - Chime has a higher enterprise value relative to its adjusted EBITDA compared to Upstart, suggesting that Upstart may be a more attractive investment option [18] - Chime faces more competition and has slower growth rates, while Upstart has a clearer path for growth and a lower valuation [19]

Core Insights - Upstart (UPST) continues to execute its vision of utilizing AI to automate consumer lending, with recent quarterly results indicating significant progress across various metrics [1] Company Performance - The latest quarterly results from Upstart demonstrate substantial advancements in its operations, reflecting the effectiveness of its AI-driven approach in the consumer lending sector [1]

Core Viewpoint - The individual investor adopts a contrarian investment style, focusing on deep value opportunities, particularly in stocks that have recently experienced sell-offs due to non-recurrent events, while also considering insider buying as a positive signal [1] Investment Strategy - The investment portfolio is split approximately 50%-50% between shares and call options, indicating a balanced approach between equity and derivatives [1] - The investor's timeframe for holding positions typically ranges from 3 to 24 months, suggesting a medium-term investment horizon [1] - Fundamental analysis is employed to assess the health of companies, including their leverage and financial ratios compared to sector and industry averages [1] - Technical analysis is utilized to optimize entry and exit points, with a focus on support and resistance levels on weekly charts [1] Stock Selection Criteria - Preference is given to stocks that have undergone a recent sell-off, particularly when there is insider buying at the new lower price, indicating potential recovery [1] - The investor screens through thousands of stocks, primarily in the US, but is open to owning shares in less stable markets, referred to as "banana republics" [1] - Professional background checks are conducted on insiders who purchase shares post-sell-off to ensure credibility and alignment with shareholder interests [1]

Core Viewpoint - Upstart Holdings is positioned as a potential investment opportunity despite a 35% decline in stock value this year, with analysts predicting a possible upside of 91% from current levels [3][14]. Company Overview - Upstart has developed an AI algorithm that evaluates over 2,500 data points to assess borrower creditworthiness, contrasting with the traditional FICO scoring system [2]. - The company aims to provide "always on" access to credit, allowing consumers to secure financing anytime via smartphones, which has led to a significant increase in loan originations [5]. Financial Performance - In Q3 2025, Upstart generated $277 million in revenue, a 71% increase year-over-year, although slightly below the forecast of $280 million [9][10]. - The company reported a net income of $31.8 million, a significant improvement from a net loss of $6.7 million in the same quarter last year, due to effective cost management [11]. - On an adjusted basis, Upstart's EBITDA was $71 million, reflecting a 26% year-over-year growth [12]. Market Position and Growth Potential - Upstart's loan applications processed autonomously by AI reached 91% in Q3 2025, showcasing the efficiency of its technology [4]. - The company is expanding into automotive lending and home equity lines of credit, with originations in these segments growing fivefold and fourfold, respectively, during the third quarter [6]. - Despite concerns about consumer financial health, Upstart has not observed a significant deterioration in credit strength and has noted improvements in some areas [7]. Analyst Sentiment - Analysts have mixed ratings on Upstart, with seven buy ratings, six hold ratings, and three sell ratings, but a general consensus that the stock is undervalued [13]. - The average price target among analysts is $55.14, indicating a potential upside of 32%, with a high target of $80 suggesting a 91% increase [14][15].

Market Overview - The recent sell-off in the stock market has created attractive investment opportunities, with stocks expected to finish November down, marking the first down month since April [1][2] - The CBOE Volatility Index has reached a six-month high, indicating increased market fear [1] Economic Indicators - Consumer sentiment has significantly declined, and the labor market has stagnated [2] - The housing market is currently at a standstill, and major retailers like Walmart, Target, and Chipotle have reported an "affordability crisis" affecting discretionary consumer spending [2] Investment Opportunities Figma - Figma's stock has experienced significant volatility, going public at $33 and peaking at $142 shortly after, driven by high demand and a previous acquisition attempt by Adobe valued at $20 billion [4][9] - Despite a decline in stock price following its Q2 earnings report due to concerns over spending, Figma's Q3 revenue rose 38% to $274.2 million, with an adjusted operating profit of $34 million [7][9] - Figma is investing in AI technologies, introducing products like Figma Weave and Figma Make, which leverage generative AI for design purposes [8][9] - The current market cap of Figma is $18 billion, which is below Adobe's previous offer, and its price-to-sales ratio of 17 is considered reasonable given its growth rate [9] Upstart - Upstart, an AI-powered loan originator, has seen its stock decline sharply, similar to other fintech companies, due to rising credit risks and slowing job growth [10][14] - Despite these concerns, Upstart's business remains strong, with loans originated increasing by 128% to 428,056 in the last quarter, and revenue jumping 71% to $277 million [13][14] - The company reported a GAAP profit of $31.8 million, or $0.23 per share, although guidance for Q4 indicates a slowdown in growth [13][14] - Upstart's stock is currently trading at a price-to-earnings ratio of 28, and despite credit environment risks, it is viewed as significantly undervalued given its growth potential in the auto and home loan markets [15]

Core Insights - Bank of America warns of explosive growth in prediction markets and sports betting, which may lead to excessive consumer debt and loan defaults [1][2] - The rapid expansion of online betting since the Supreme Court overturned the federal ban on sports betting is creating new credit risks for lenders [1] - The financial pressure from betting losses is particularly significant among low-income consumers, especially young males [1][2] Group 1: Market Dynamics - The marketing of gambling products amplifies participation, resulting in rising credit balances and higher loan loss rates [2] - Companies like Bread Financial Holdings, Upstart Holdings, and OneMain Holdings are most vulnerable to the impact of low-income or credit-pressured consumers [2] - The online betting market presents new risks for lenders that have not been historically encountered, necessitating adjustments to underwriting models [2] Group 2: Consumer Behavior and Financial Impact - Recent studies indicate that in states where online gambling is allowed, average credit scores have dropped by nearly 1% and the likelihood of bankruptcy has increased by 28% after four years [1] - A survey cited by Bank of America reveals that 25% of gamblers have missed bill payments, and 45% lack sufficient funds to cover living expenses for three to six months [2] Group 3: Growth of Prediction Markets - Prediction markets have gained popularity by offering binary financial contracts linked to outcomes of elections and sports events, with nominal monthly trading volume exceeding $8.5 billion in October [3] - The growth is largely driven by contracts linked to sports events on platforms like Kalshi, which operates nationwide despite state-level regulatory opposition [3] - The design and gamified interface of these platforms blur the lines between investment and gambling, raising concerns about compulsive behavior and liquidity pressure among young and low-income consumers [3] Group 4: Industry Positioning - Prediction markets claim to offer a fairer model than sports betting companies by providing a neutral trading venue without directly betting against customers [4] - Kalshi's spokesperson emphasizes that their model is federally regulated and offers more transparent pricing, unlike traditional casinos [4] - Polymarket has recently cleared regulatory hurdles to re-enter the U.S. market after reaching a settlement with the Commodity Futures Trading Commission [4]