BTIG notes that August data from Upstart’s (UPST) ABS securitizations shows accelerating delinquencies in both the months of July and August. The firm is “candidly surprised” by the rapid increase. Interestingly, most of the delinquency development is happening with Upstart’s older vintages. This is consistent with what BTIG is seeing in other asset classes as well, such as in its August auto lender report. As stated previously, the firm says it is seeing the delinquency trend across different sources, and therefore it doesn’t think Upstart’s data is symptomatic of problems with Upstart’s underwriting. Nevertheless, BTIG wonders if consensus transaction volume estimates are too high. The firm has a Neutral rating on Upstart.
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