Upstart Holdings (UPST) AI Stock Analysis

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Upstart Holdings

(NASDAQ:UPST)

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Neutral 45 (OpenAI - 4o)

Rating:45Neutral

Price Target:

$63.00

▲(20.85% Upside)

Upstart Holdings' overall score is primarily influenced by its financial performance and valuation challenges. Despite strong revenue growth and positive earnings call sentiment, the company's high leverage, negative profitability, and weak valuation metrics weigh heavily on its score. Technical analysis provides a neutral outlook, but the lack of dividend yield and negative P/E ratio are significant detractors.

Positive Factors

Revenue Growth

The significant revenue growth reflects Upstart's expanding market presence and successful execution of its business model, indicating strong demand for its AI-driven lending platform.

Return to Profitability

Achieving profitability ahead of schedule demonstrates effective cost management and operational efficiency, enhancing long-term financial stability and investor confidence.

Loan Origination Growth

Record loan originations indicate robust demand for Upstart's services, supporting sustained revenue growth and reinforcing its competitive position in the lending market.

Negative Factors

High Leverage

High leverage can increase financial risk, potentially limiting Upstart's ability to invest in growth opportunities and weather economic downturns, affecting long-term viability.

Profitability Challenges

Struggles with profitability highlight inefficiencies in translating revenue into net income, which could hinder Upstart's ability to reinvest in its business and sustain growth.

Cash Flow Weakness

Weak cash flow performance indicates potential liquidity issues, which could constrain Upstart's operational flexibility and capacity to fund strategic initiatives.

Upstart Holdings (UPST) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$5.07B

Dividend YieldN/A

Average Volume (3M)7.14M

Price to Earnings (P/E)―

Beta (1Y)3.60

Revenue Growth60.62%

EPS Growth96.91%

CountryUS

Employees1,193

SectorFinancial

Sector Strength70

IndustryFinancial - Credit Services

Share Statistics

EPS (TTM)0.36

Shares Outstanding96,217,740

10 Day Avg. Volume8,602,449

30 Day Avg. Volume7,135,910

Financial Highlights & Ratios

PEG Ratio0.86

Price to Book (P/B)8.70

Price to Sales (P/S)8.76

P/FCF Ratio29.69

Enterprise Value/Market Cap1.48

Enterprise Value/Revenue8.54

Enterprise Value/Gross Profit9.63

Enterprise Value/Ebitda-1.23K

Forecast

1Y Price Target

$69.71

Price Target Upside33.72% Upside

Rating ConsensusHold

Number of Analyst Covering11

Upstart Holdings Business Overview & Revenue Model

Company DescriptionUpstart Holdings, Inc., together with its subsidiaries, operates a cloud-based artificial intelligence (AI) lending platform in the United States. Its platform aggregates consumer demand for loans and connects it to its network of the company's AI-enabled bank partners. The company was founded in 2012 and is headquartered in San Mateo, California.

How the Company Makes MoneyUpstart generates revenue primarily through its loan origination fees and interest income. The company partners with banks to fund loans and earns a percentage of the loan amount as a fee for connecting borrowers with lenders. Additionally, Upstart retains a portion of the interest earned on the loans it originates. The company also offers ancillary services such as credit report access and financial education tools, contributing to its revenue streams. Strategic partnerships with financial institutions enhance its market reach and operational efficiency, while its proprietary technology allows for lower default rates and improved loan performance, further driving profitability.

Upstart Holdings Key Performance Indicators (KPIs)

Any

Transaction Volume

Transaction Volume
Indicates the total number of transactions processed, reflecting the company's market activity and potential revenue growth.

Chart InsightsUpstart Holdings has seen a robust recovery in transaction volume, rebounding from a dip in 2022 to reach its highest levels in three years by mid-2025. This resurgence is underpinned by significant growth in the Auto and Home segments, driven by advancements in Model 22 and operational improvements. The latest earnings call highlights a 102% year-over-year revenue growth and a return to profitability, suggesting strong momentum and strategic execution. However, increased loan balances and a competitive market could pose challenges as Upstart continues to expand its product offerings.

Data provided by:

Main Street Data

Upstart Holdings Earnings Call Summary

Earnings Call Date:Aug 05, 2025

(Q2-2025)

% Change Since: |

Next Earnings Date:Nov 11, 2025

Earnings Call Sentiment Positive

The earnings call for Upstart's second quarter of 2025 presented a largely positive outlook. The company achieved significant revenue growth and returned to GAAP profitability earlier than anticipated. Strong performance in the Auto and Home segments and advancements in AI models contributed to this success. However, increased balance sheet usage and challenges with fair value adjustments were noted as areas for improvement.

Q2-2025 Updates

Positive Updates

Triple-Digit Revenue Growth

Upstart achieved a 102% year-on-year revenue growth, reaching $257 million in total revenue for Q2 2025.

Return to GAAP Profitability

Upstart reached GAAP profitability a quarter sooner than expected, with a GAAP net income of $6 million for Q2 2025.

Record Loan Originations

Loan originations on the Upstart platform in Q2 were $2.8 billion, the highest volume in 3 years.

Strong Growth in Auto and Home Segments

The Auto business grew 87% sequentially, and the Home business grew 67% sequentially.

Model 22 Enhancements

Model 22 increased separation accuracy advantage by 17 percentage points, improving conversion rates from 19% in Q1 to 24% in Q2.

Improved Contribution Margins

Contribution margin improved to 58% in Q2, up 3 percentage points from the prior quarter.

Negative Updates

Increased Balance Sheet Usage

Loans held directly on the balance sheet increased to $1.02 billion, up from $815 million in Q1, largely due to new product scaling.

Fair Value Adjustment Impact

Fair value adjustments were more negative than in previous quarters, impacting net interest income guidance.

Company Guidance

In the second quarter of fiscal year 2025, Upstart demonstrated significant growth and exceeded expectations in multiple metrics, showcasing its return to growth mode. The company achieved a 102% year-on-year revenue growth, reaching $257 million, and attained GAAP profitability a quarter sooner than anticipated. Originations on the Upstart platform hit $2.8 billion, marking the highest volume in three years. The Auto business grew 87% sequentially, while the Home business saw a 67% sequential increase. Newer business segments, including small dollar loans, made up more than 10% of originations, with small dollar loans alone growing 40% sequentially. Conversion rates improved from 19% in Q1 to 24% in Q2, driven by model advancements such as Model 22. Upstart's contribution margin rose to 58%, and the company ended the quarter with a GAAP net income of $6 million. Looking forward, the company expects total revenues of approximately $280 million in Q3 2025, reflecting continued momentum and effective execution of its business strategy.

Upstart Holdings Financial Statement Overview

Summary

Upstart Holdings shows strong revenue growth but struggles with profitability and cash flow management. High leverage and negative returns on equity highlight financial risks, necessitating improvements in profitability and cash flow generation.

Income Statement

Neutral

Upstart Holdings has shown a significant revenue growth rate of 17.97% in the TTM, indicating strong top-line growth. However, the company is struggling with profitability, as evidenced by negative net profit and EBIT margins. The gross profit margin remains high, but the inability to translate this into net profits is concerning.

Balance Sheet

Negative

The company has a high debt-to-equity ratio of 2.04 in the TTM, indicating a leveraged position which could pose risks if not managed properly. Return on equity is negative, reflecting the company's challenges in generating profits from shareholders' equity. The equity ratio is relatively stable, suggesting some balance in asset financing.

Cash Flow

Negative

Upstart Holdings is facing challenges with cash flow, as indicated by negative operating cash flow and free cash flow in the TTM. The free cash flow to net income ratio is positive, suggesting some efficiency in converting net income to cash, but overall cash flow performance is weak.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	877.03M	628.83M	508.12M	837.76M	846.61M	222.05M
Gross Profit	777.87M	628.83M	508.12M	837.76M	846.61M	222.05M
EBITDA	-6.08M	-111.87M	-196.73M	-89.51M	152.93M	22.07M
Net Income	-6.35M	-128.58M	-240.13M	-108.67M	135.44M	5.98M
Balance Sheet
Total Assets	2.48B	2.37B	2.02B	1.94B	1.82B	477.25M
Cash, Cash Equivalents and Short-Term Investments	400.56M	793.61M	368.40M	422.41M	986.61M	250.82M
Total Debt	1.47B	1.54B	1.23B	1.09B	795.80M	82.06M
Total Liabilities	1.76B	1.73B	1.38B	1.26B	1.01B	177.00M
Stockholders Equity	722.01M	633.22M	635.30M	672.43M	807.08M	300.25M
Cash Flow
Free Cash Flow	-68.88M	185.49M	-172.58M	-697.59M	153.24M	10.09M
Operating Cash Flow	-65.23M	186.33M	-160.49M	-674.68M	168.35M	15.70M
Investing Cash Flow	-312.48M	-237.73M	-118.45M	-114.13M	-143.88M	136.52M
Financing Cash Flow	518.56M	559.87M	214.27M	130.03M	855.43M	79.05M

Upstart Holdings Technical Analysis

Technical Analysis Sentiment

Negative

Last Price52.13

Price Trends

50DMA

68.30

Negative

100DMA

64.11

Negative

200DMA

61.32

Negative

Market Momentum

MACD

-3.96

Positive

RSI

30.25

Neutral

STOCH

5.17

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UPST, the sentiment is Negative. The current price of 52.13 is below the 20-day moving average (MA) of 62.68, below the 50-day MA of 68.30, and below the 200-day MA of 61.32, indicating a bearish trend. The MACD of -3.96 indicates Positive momentum. The RSI at 30.25 is Neutral, neither overbought nor oversold. The STOCH value of 5.17 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for UPST.

Upstart Holdings Risk Analysis

Upstart Holdings disclosed 83 risk factors in its most recent earnings report. Upstart Holdings reported the most risks in the "Finance & Corporate" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Upstart Holdings Peers Comparison

Overall Rating

UnderperformOutperform

Sector (68)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CACC	69 Neutral	$5.39B	13.82	14.17%	―	12.63%	149.03%
OMF	68 Neutral	$6.63B	10.21	19.93%	7.45%	9.41%	13.98%
LC	67 Neutral	$1.71B	23.30	3.83%	―	7.54%	70.26%
SEZL	63 Neutral	$2.68B	27.05	80.20%	―	92.95%	151.46%
NAVI	60 Neutral	$1.32B	40.49	1.33%	4.84%	-25.37%	-75.77%
UPST	45 Neutral	$5.07B	―	-0.96%	―	60.62%	96.91%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%

* Financial Sector Average

Performance Comparison

UPST

Upstart Holdings

52.13

13.19

33.87%

CACC

Credit Acceptance

479.28

44.35

10.20%

NAVI

Navient

13.23

-1.35

-9.26%

LendingClub

14.93

3.70

32.95%

OMF

OneMain Holdings

55.81

13.89

33.13%

SEZL

Sezzle Inc.

78.83

51.77

191.32%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Sep 23, 2025