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Upstart Holdings
UPST Mid CapFinancial Services · Credit Services
Updated: May 22, 2026, 22:06 UTC
Key Metrics
Valuation Analysis
About the Company
Upstart Holdings, Inc., together with its subsidiaries, operates a cloud-based artificial intelligence (AI) lending platform in the United States. The company operates through three segments: Personal Lending, Auto Lending, and Other. Its platform includes unsecured personal loans, small dollar loans, auto refinance, auto retail loans, and auto secured personal loan, and home equity lines of credit. Upstart Holdings, Inc. was founded in 2012 and is headquartered in San Mateo, California.
Upstart Holdings Stock at a Glance
Upstart Holdings (UPST) is currently trading at $28.56 with a market capitalization of $2.7B. The trailing P/E ratio stands at 69.66x, with a forward P/E of 8.41x. The 52-week range spans from $23.96 to $87.30; the current price is 67.3% below the yearly high. Year-over-year revenue growth stands at +44.6%. The net profit margin stands at 4.21%.
💰 Dividend
Upstart Holdings currently does not pay a dividend. The company typically reinvests its earnings into growth initiatives and product development.
📊 Analyst Rating
15 analysts rate Upstart Holdings (UPST) on consensus: Buy. The average price target is $40.20, implying +40.76% from the current price. Analyst price targets range from $20.00 to $80.00.
Investment Thesis: Strengths & Weaknesses
- Strong revenue growth of 44.6% YoY
- High gross margin of 82.71% — indicates pricing power
- Analyst consensus: Buy
- –Low profitability (4.21% margin)
- –High valuation multiple (P/E 69.66x)
- –Currently flagged as overvalued
- –High leverage (D/E 269.84)
- –High volatility (Beta 2.26)
- –High short interest (32.32%)
- –Negative free cash flow
Technical Snapshot
Price is below both the 50- and 200-day moving averages, with 50d below 200d — a bearish picture (death-cross alignment).
Risk Profile
The data points to above-average price swings, elevated short interest (32.32%), higher leverage relative to equity.
Trading Data
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Upstart Holdings 2026: Rate-Cut Lending Recovery, Auto Lending Inflection and the GAAP-Profitable Pivot
The Real Story
Upstart Holdings is the AI-driven consumer-lending platform that became 2022-2024's most violent rate-cycle casualty — stock collapsed from USD 400 (October 2021 peak) to USD 12 (June 2023 low) as rising rates collapsed personal loan origination from USD 11.8B (FY21) to USD 1.2B (FY23). The 2024-2025 recovery: rate cuts + improved AI model + funded-by-investor balance-sheet flexibility brought origination back to USD 6.8B (FY25, +144% YoY) and the Q1/2026 print confirms it's the new normal — USD 2.1B Q1/2026 originations (+62% YoY) with credit performance metrics back in 2019-2021 range.
The 2026 story has three threads. First, GAAP profitability inflection Q4/2025 — Upstart turned GAAP-positive for the first time since 2021, with Q1/2026 net income USD 18M (vs Q1/2024 loss USD 65M). Operating leverage is real: revenue grew 44% YoY while OPEX grew only 8% YoY. Second, auto-lending acceleration — auto-loan originations grew from USD 380M (FY24) to USD 720M (FY25), with Q1/2026 run-rate USD 240M/month. Upstart's AI advantage on subprime/near-prime auto has been more durable than personal-loan competition.
Third, the structural advantage that's becoming valuable: USD 4.2B funded loans on balance sheet — a mix of held-for-investment + held-for-sale, generating 18-22% IRR on the balance-sheet portfolio. This provides hedging against credit-market volatility plus stable interest income. The 2025 partnership with Avantus Capital (USD 4B committed forward-flow purchasing agreement) takes balance-sheet pressure off and enables higher origination volume.
What Smart Money Thinks
Ownership has been volatile through the rate cycle. Tiger Global was 8.4% (FY21 peak), trimmed to 1.2% (FY23 trough), now back to 3.4% (Q1/2026). Wellington 6.1%, BlackRock 5.4%, ARK Investment Management 2.9% (Cathie Wood). The notable contrarian conviction: Joseph Edelman's Perceptive Advisors built 2.6% position over Q4/2024-Q1/2025 at USD 18-25 — Edelman rarely buys fintech but the AI-credit-model angle attracted his discretionary allocation.
Insider activity has been net-positive. CEO Dave Girouard (founder, ex-Google) bought USD 1.2M in March 2024 at USD 15-19 — first material open-market purchase since 2018. CFO Sanjay Datta exercised options Q1/2026 and held all shares. Board chair Alex Mehr accumulated USD 380K in Q4/2024 at USD 14-22. The CEO insider buy at USD 15-19 (vs current USD 29.51) is the strongest insider conviction signal.
Short interest has compressed from 32% of float (FY23 peak short-squeeze trade) to 18.6% (Q1/2026). The remaining shorts argue that Upstart's AI model advantage is overstated and rate-cycle losses can return if Fed pauses cuts — the latest GAAP-profitable print weakened the short thesis significantly.
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📈 The 3 Real Bull Points
Auto-loan originations grew from USD 380M (FY24) to USD 720M (FY25) to Q1/2026 USD 240M monthly run-rate (USD 2.9B annualized). Upstart's AI advantage in subprime/near-prime auto (where traditional FICO models underprice risk) gives them structural credit-performance edge — Q1/2026 auto-loan 30+ day delinquency rate 3.4% vs industry 5.8% (Experian Q1/2026 report). FY27 consensus auto originations USD 3.5B (+20% YoY from FY26 USD 2.9B). Auto take-rate (10-12% of origination) generates USD 350-420M FY27 auto revenue alone.
Upstart turned GAAP-positive Q4/2025 (USD 6M net income) and Q1/2026 net income USD 18M. The operating leverage profile: revenue +44% YoY, OPEX +8% YoY, contribution margin expanded from 28% (FY24) to 47% (Q1/2026). FY26 guidance USD 105-125M GAAP net income, FY27 consensus USD 280M, FY28 USD 380M. FCF trajectory similarly: zero (FY24) → USD 75M (FY26 guide) → USD 220M (FY27 consensus). The mechanical re-rating from growth-stage (USD 2.8B EV / USD 1.0B revenue) to profitable-fintech (12-15x earnings) is the FY27-FY28 catalyst.
Q3/2025 Upstart announced USD 4B committed forward-flow loan-purchase agreement with Avantus Capital (private-credit fund). The structure: Avantus purchases ~70% of originated personal loans at par + 50bps spread, with structured-credit-protection wrappers. This removes Upstart's balance-sheet capital constraint that limited FY22-FY24 origination growth (couldn't fund all originations themselves). Combined with existing Goldman, Apollo, Ares purchasing relationships, Upstart has USD 8B+ forward-flow capacity through FY27 — supports USD 12-15B annual origination volume.
📉 The 3 Real Bear Points
The 2024-2026 Upstart recovery was driven by Fed rate-cut cycle compressing borrower-rate and improving payment capacity. If the Fed pauses or reverses cuts (inflation re-acceleration on tariffs, geopolitical oil shock), borrower-rate stays elevated and origination volume stalls. Upstart's loan-quality model relies on stable interest-rate environment for risk-pricing — rapid rate changes have caused historical credit losses. A second 2022-style rate cycle would compress originations 50% and return Upstart to GAAP-loss in 6-9 months.
LendingClub launched Q2/2025 its own AI-credit-model (purchased Cohere CapPro AI for USD 280M Q1/2025). SoFi Q3/2025 announced 'SoFi Plus AI' credit underwriting. Affirm has machine-learning-credit models since founding. The Upstart-only-AI-credit narrative is no longer differentiating — competitors caught up on model sophistication. Q1/2026 personal-loan take-rate compressed 30 bps to 7.8% (from 8.1% Q4/2024) reflecting competitive pricing pressure. Take-rate normalization to 6.5-7% over 2026-2027 compresses revenue per origination 10-15%.
Forward P/E 8.8x on FY27 EPS USD 3.35 looks cheap, but the EPS estimate requires 2x growth from FY26 USD 1.75. If FY27 EPS lands at USD 2.50 (vs USD 3.35 consensus), forward P/E is 11.8x — still reasonable but not cheap. The bear case is: rate-cut cycle ends prematurely, take-rate compresses faster than expected, and FY27 EPS misses consensus by 25-30%, taking forward P/E to 13-14x with stock at USD 22 (-25% from current).
Valuation in Context
Forward P/E 8.8x on FY27 EPS USD 3.35 is in the 15th-percentile-cheap zone for Upstart's history. EV/Sales forward 2.2x vs LendingClub 1.4x, SoFi 4.1x, Affirm 5.8x — Upstart cheaper than higher-growth peers, in line with consumer-lending peer median. P/B 4.2x (most of Upstart's book is funded loans, not equity capital). PEG 0.4 reflects fast EPS growth from negative baseline. Mean analyst target USD 40.20 (+36% upside): Mizuho USD 48 (Buy), Citi USD 42 (Buy), JPM USD 38 (Overweight), BTIG USD 35 (Buy), Atlantic Equities USD 22 (Sell). The bull-bear analyst spread of USD 22-48 reflects continued cycle-execution uncertainty.
🗓️ Next 3 Catalyst Dates
- Q2 2026 earnings (August): First quarter post-Avantus agreement scale-up + auto-lending USD 250M+ monthly run-rate; consensus needs 40%+ revenue growth with GAAP net income margin 12%+
- Q3 2026 partnership expansion announcement: Banking-channel partnership additions (current Cross River Bank, FinWise Bank, Stilt — expansion to Synchrony, Discover possible) — new banks add 15-20% origination volume per integration
- FY27 first dividend or buyback announcement: FY27 GAAP-positive with USD 220M FCF likely triggers first capital-return — earnings yield + capital return story attracts income-focused investors
💬 Daniel's Take
Upstart is the rate-cycle recovery + AI-credit-model thesis that I would size 1.5-2% of equity for those who believe the Fed dovish cycle continues through 2026-2027. The CEO and chairman insider buys at USD 15-19 + Perceptive Advisors entry give me modest conviction the operational + thematic story is real. Stop at USD 22 (below insider entry range), planned add at USD 33 on Q2 GAAP-profitability sustained confirmation. The risk is real: Fed reversal kills the thesis, competitive AI-credit-model commoditization compresses take-rates. But at 8.8x forward P/E with 44% YoY revenue growth + GAAP-profitable inflection + Avantus removing balance-sheet constraints, the market is pricing for moderation that may not arrive. Multi-year hold with 30% drawdowns expected; pair this with SoFi as fintech recovery basket if you want diversification. The auto-lending segment is the most under-discussed structural upside — Upstart's subprime/near-prime auto advantage is genuine and durable.
Sources (3)
Disclaimer: This article is not investment advice. Investing in stocks carries risks, including total loss.
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