Over the past six months, the cloud-based lending platform Upstart (UPST) stakeholders have had nothing short of a rollercoaster ride over the past six months. Under three months, the shares of the company essentially quadrupled in under three months, ultimately hitting an intra-day high of $401 in October.
Upstart Holdings was listed in December 2020 at $20 per share. By October 2021 it reached a high of $401, delivering a return of 1,900%. But amid the recent tech sell-off, Upstart’s stock has declined to $84 as of midday Monday.
The Upstart is the artificial intelligence (AI)-driven lending platform, which makes the company intriguing and is all about efficiency. Upstart quickly determines the creditworthiness of customers with the help of AI.
The UPST Holdings estimates the addressable market for automotive loan originations is $672 billion per year, about eight times larger than personal loans. The company first began by originating unsecured personal loans, but recently expanded into a large segment of automotive finance.
The analysts expect the company will deliver $1.2 billion of revenue in 2022, but with its automotive segment quickly ramping up, it could blow all estimates out of the water yet again this year. But more importantly, Upstart is profitable, and that’s rare for a relatively young tech company.
With $2.35 in estimated earnings per share for 2022, Upstart’s stock trades at a forward price-to-earnings multiple of 36.
In five or even 10 years from now, the current price might look like a bargain, especially considering Wall Street investment bank CitiGroup recently attributed a $350 target to the stock.