Upstart Has Proven Itself - Current Premium Not Worth It

Summary

• UPST's outperformance has been validated by the excellent performance metrics and the growing profitability, aided by the raised FY2025 GAAP net income guidance.
• Much of its tailwinds are attributed to the efficient consumer acquisition trends through cross-selling, the growing loan conversion rates, and the improved operational scale.
• With two Fed rate cuts likely in H2'25 and borrowing costs moderating from henceforth, UPST is likely to sustain its promising high growth/ profitable cadence ahead.
• Even so, we are uncertain if it is wise to chase an expensive stock during an exuberant market environment, worsened by the drastically higher short-interest volumes.
• Based on UPST's historical price cycle since the H1'23 bottom, we are likely to see a double-digit correction to its established uptrend support line ahead. Patience for now.

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UPST's Profitable/High-Growth Proposition Will Be A Lot More Compelling After A Deep Pullback

We previously covered Upstart Holdings, Inc. (NASDAQ:UPST) in February 2025, discussing how it had demonstrated great resilience and growing relevance in the lending

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

The analysis is provided exclusively for informational purposes and should not be considered professional investment advice. Before investing, please conduct personal in-depth research and utmost due diligence, as there are many risks associated with the trade, including capital loss.