GICS Sector : Financial Services
Upstart 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. Show Full description
Upstart's Q3 2025 financial performance was impressive, with total revenue reaching $277 million, up 71% year-over-year and 8% sequentially. Revenue from fees was $259 million, while net interest income was $19 million. The company's GAAP net income was approximately $32 million, beating expectations, with an EPS of $0.52 relative to estimates at $0.42. Adjusted EBITDA was around $71 million, also ahead of expectations.
Publication Date: Nov -10
The company's operational performance was equally strong, with over 2 million applications submitted in Q3, up over 30% from Q2. The risk models responded to macroeconomic signals by moderately reducing approvals and increasing interest rates, driving a reduction in conversion rate. Despite this, Upstart sees no material deterioration in consumer credit strength and has recently seen signs of improvement. As David Girouard mentioned, "We're seeing healthy growth in the auto segment, with no direct impact from recent high-profile bankruptcies."
Upstart's newer products, including small-dollar loans, auto, and home, continue to improve and mature, accounting for almost 12% of originations and 22% of new borrowers in Q3. Transaction volume for auto, home, and small-dollar each grew in the range of 300% year-on-year. The company has secured 7 new bank and credit union partners, reaching a new all-time high in monthly available funding in Q3.
With a P/S Ratio of 3.83 and an EV/EBITDA of 70.18, the market is pricing in significant growth expectations. Analysts estimate next year's revenue growth at 23.0%. Given the company's strong operational performance and improving credit health, it remains to be seen whether Upstart can meet these expectations. The company's guidance for Q4 expects total revenues of approximately $288 million, with an adjusted EBITDA margin of 22% for the full year 2025.
The company's credit performance is also showing signs of improvement, with Sanjay Datta noting that "the sub-660 population is in reasonably good shape, while the 720-750 segment has elevated default rates, and the 800-plus segment is doing very well." Upstart's ability to control for thousands of variables provides a more precise understanding of credit performance in real-time, which may differ from traditional credit metrics.
10 AI Stocks Worth Buying Right Now
Dec -04
Edgestream Partners L.P. Sells 17,618 Shares of Upstart Holdings, Inc. $UPST
Dec -04
Upstart: Improving Fundamentals And A Still Discounted Price
Dec -03
Upstart: Beware The Issues In The Auto Loan Kitchen
Dec -02
1 Intriguing Artificial Intelligence (AI) Stock That Could Soar by Up to 91%, According to Wall Street
Nov -30
My 2 Favorite Stocks to Buy Now
Nov -28
PGY vs. UPST: Which AI Credit Platform Has Stronger Growth Setup?
Nov -25
Upstart's AI Lending: Can Its Underwriting Model Stay Ahead?
Nov -21
Upstart Holdings, Inc.'s growth is driven by its innovative lending model, which leverages AI to assess creditworthiness, offering competitive interest rates and origination fees. This approach attracts a large customer base, fueling growth in the personal loan market.
Upstart Holdings' growth is driven by increasing demand for AI-powered lending, expansion into new markets, and strategic partnerships. The company's interest income from lending activities and fair value adjustments on investments contribute to its revenue growth.
Upstart offers personal loans ranging from $1,000 to $50,000 with fixed interest rates and repayment terms of 3 or 5 years.
Upstart offers credit cards with no annual fee, cashback rewards, and credit-building benefits.
Upstart provides auto loans for new and used vehicles, with competitive rates and flexible repayment terms.
Upstart offers small business loans with flexible repayment terms and competitive interest rates.
Upstart Holdings, Inc. operates in the fintech industry, which is characterized by a moderate threat of substitutes. While there are alternative lending platforms, Upstart's AI-powered lending model and focus on prime borrowers differentiate it from competitors.
Upstart's customers are primarily individual borrowers, who have limited bargaining power. The company's platform is designed to provide personalized loan offers, making it difficult for customers to negotiate prices.
Upstart's suppliers are primarily banks and investors that provide capital for lending. The company's platform is designed to attract multiple suppliers, reducing their bargaining power.
The fintech industry is characterized by a moderate threat of new entrants. While there are barriers to entry, such as regulatory compliance and capital requirements, new entrants can still disrupt the market.
The fintech industry is highly competitive, with multiple players competing for market share. Upstart faces intense rivalry from established players and new entrants, which can lead to pricing pressure and increased marketing expenses.
| Value | |
|---|---|
| Debt Weight | 65.32% |
| Debt Cost | 3.95% |
| Equity Weight | 34.68% |
| Equity Cost | 13.95% |
| WACC | 7.41% |
| Leverage | 188.38% |
Value: 9.4
Growth: 3.3
Quality: 6.0
Yield: 0.0
Momentum: 10.0
Volatility: 2.0
1-Year Total Return ->
Value: 9.1
Growth: 2.9
Quality: 4.9
Yield: 0.0
Momentum: 7.5
Volatility: 2.3
1-Year Total Return ->
Value: 9.3
Growth: 2.6
Quality: 7.9
Yield: 0.0
Momentum: 1.5
Volatility: 3.7
1-Year Total Return ->
Value: 7.3
Growth: 5.0
Quality: 4.8
Yield: 0.0
Momentum: 2.0
Volatility: 3.7
1-Year Total Return ->
Value: 6.6
Growth: 2.4
Quality: 5.2
Yield: 0.0
Momentum: 4.5
Volatility: 1.0
1-Year Total Return ->
Value: 4.6
Growth: 0.7
Quality: 1.4
Yield: 0.0
Momentum: 0.5
Volatility: 2.0
1-Year Total Return ->