The Ceiling is High for Upstart

How does Upstart make money? Wall Street analysts believe the financial lending platform is worth up to 84% more.

Upstart Holdings  (UPST)  is a lending platform that uses AI to assess the credit worthiness of potential borrowers. Upstart uses machine learning to look at more variables than normal credit-risk assessments, which it says will allow banks to lend to more borrowers with less risk due to the increased accuracy of this method.

How does Upstart make money?

  • Instead of traditional loan interest and fees, the company collects a referrer fee for connecting borrowers with its network of lenders.
  • This allows Upstart to be very profitable without much risk.
  • With $2.35 in estimated earnings per share for 2022, Upstart's stock trades at a forward price-to-earnings multiple of 36.

At the beginning of March, Upstart announced the launch of its Upstart Auto Retail mobile platform. The platform connects buyers to dealer inventory and Upstart’s AI-powered financing. Prior to this mobile-first version, dealer adoption of Upstart Auto Retail had grown 4x in 2021.

Wall Street analysts believe the company is worth over 84% more if the economy does not head into a recession.

Looking into the lucrative business of online lending? Add one of these outcomes to your portfolio: UPST

Source: Investor Place


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