Upstart Holdings (UPST) AI Stock Analysis

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Upstart Holdings

(NASDAQ:UPST)

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Neutral 55 (OpenAI - 4o)

Rating:55Neutral

Price Target:

$46.00

▼(-4.41% Downside)

Upstart Holdings' overall stock score is primarily influenced by its strong earnings call performance, which highlights significant revenue growth and strategic advancements. However, this is offset by financial performance challenges, including high leverage and negative operating cash flow, as well as technical indicators suggesting bearish momentum. The high P/E ratio further indicates overvaluation concerns.

Positive Factors

Revenue Growth

Strong revenue growth indicates robust demand for Upstart's services, reflecting successful market penetration and product adoption, which supports long-term business expansion.

Product Diversification

Diversification into new product segments reduces reliance on a single revenue stream, enhancing resilience against market fluctuations and supporting sustainable growth.

Partnership Expansion

Expanding partnerships with financial institutions strengthens Upstart's market position and increases its funding capacity, supporting long-term scalability and operational efficiency.

Negative Factors

High Leverage

High leverage poses a risk to financial stability, potentially limiting the company's ability to invest in growth opportunities and increasing vulnerability to economic downturns.

Negative Operating Cash Flow

Negative operating cash flow suggests challenges in covering operational expenses, which could strain liquidity and impact the company's ability to sustain growth and innovation.

Profitability Concerns

Low profitability margins indicate operational inefficiencies, which may hinder the company's ability to reinvest in its business and compete effectively in the long term.

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

Market Cap

$4.68B

Dividend YieldN/A

Average Volume (3M)4.29M

Price to Earnings (P/E)211.2

Beta (1Y)3.47

Revenue Growth73.29%

EPS GrowthN/A

CountryUS

Employees1,193

SectorFinancial

Sector Strength70

IndustryFinancial - Credit Services

Share Statistics

EPS (TTM)0.52

Shares Outstanding97,286,480

10 Day Avg. Volume4,711,999

30 Day Avg. Volume4,285,686

Financial Highlights & Ratios

PEG Ratio0.86

Price to Book (P/B)8.70

Price to Sales (P/S)8.14

P/FCF Ratio29.69

Enterprise Value/Market Cap1.43

Enterprise Value/Revenue6.76

Enterprise Value/Gross Profit7.33

Enterprise Value/Ebitda119.17

Forecast

1Y Price Target

$56.73

Price Target Upside17.89% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering12

EPS Forecast (FY)2.37

Revenue Forecast (FY)$1.27B

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 fees charged to its lending partners, which include banks and credit unions. The company earns a percentage of the loan amounts it facilitates, typically ranging from 1% to 6% of the loan value. Additionally, Upstart collects interest from borrowers on the loans it issues, although the majority of its revenue comes from fees rather than interest income. The company also benefits from its proprietary technology, which helps partners optimize their lending processes and reduce default rates. Significant partnerships with financial institutions enhance Upstart's reach and contribute to its earnings, as these collaborations allow for a broader distribution of its loan offerings.

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:

The Fly

Upstart Holdings Earnings Call Summary

Earnings Call Date:Nov 04, 2025

(Q3-2025)

% Change Since: |

Next Earnings Date:Feb 10, 2026

Earnings Call Sentiment Positive

Upstart's Q3 earnings call highlighted strong financial performance, significant growth in transaction volume, and progress in new product segments. However, conservative model adjustments and macroeconomic caution led to reduced conversion rates and a slight shortfall in transaction revenue expectations.

Q3-2025 Updates

Positive Updates

Strong Revenue and Profit Growth

Upstart reported a 71% year-on-year revenue growth, reaching $277 million for Q3 2025. The company's GAAP net income grew by a factor of 6 over the prior quarter, with GAAP earnings per share at $0.23.

Surge in Transaction Volume and Applications

Transaction volume increased by 80% year-on-year, with more than 2 million applications submitted in Q3, marking a 30% increase from Q2. Q3 also recorded the highest application levels in more than 3 years.

Growth in New Product Segments

Newer products like auto, home, and small-dollar loans accounted for almost 12% of originations and 22% of new borrowers in Q3. Transaction volume for these segments grew by around 300% year-on-year.

Expansion in Auto Retail Business

The auto retail business more than doubled the number of live lending rooftops in Q3, with transaction volume growing over 70% sequentially.

Strong Position in Funding and Partnerships

Upstart added 7 new bank and credit union partners and reached a new all-time high in monthly available funding. The company also issued an oversubscribed securitization in September.

Negative Updates

Reduction in Conversion Rates

The approval rate on Upstart's platform decreased from 23.9% in Q2 to 20.6% in Q3 due to conservative adjustments in response to macroeconomic signals.

Impact of Model Conservatism

Upstart's model exhibited conservatism due to macroeconomic signals, resulting in a transaction revenue that was marginally short of expectations.

Challenges in the Auto Segment

Despite growth, there were concerns about broader market noise and fraud in the auto finance space, which could extend timelines for partner deals.

Company Guidance

During the Upstart Third Quarter 2025 Earnings Call, the company shared impressive financial results and insights into its strategic direction. Upstart reported an 80% year-on-year growth in transaction volume and a 71% increase in revenue, achieving a GAAP net income that grew six-fold over the previous quarter. The number of applications submitted rose over 30% from Q2, reaching a three-year high of more than 2 million. Despite this demand, the transaction volume was below expectations due to conservative adjustments in their risk models, which led to a decrease in conversion rates from 23.9% in Q2 to 20.6% in Q3. Their newer product offerings, including small-dollar loans, auto, and home loans, accounted for nearly 12% of originations, with a 300% year-on-year growth in transaction volume. The company also expanded its auto retail business by over 70% sequentially and added new states and partners. Upstart's securitization efforts in September attracted 30 investors, including seven first-time participants. Looking forward, Upstart expects total Q4 revenues of approximately $288 million and aims to capitalize on its AI capabilities to navigate the evolving macroeconomic landscape, setting the stage for a promising 2026.

Upstart Holdings Financial Statement Overview

Summary

Upstart Holdings shows moderate revenue growth and strong gross margins, but faces challenges with profitability and high leverage. While free cash flow growth is positive, negative operating cash flow highlights cash management issues. The company shows potential for recovery but must address profitability and leverage concerns to improve financial health.

Income Statement

Positive

Upstart Holdings shows a positive revenue growth rate of 12.88% TTM, indicating a recovery from previous declines. The gross profit margin remains strong at 65.66%, but the net profit margin is low at 3.28%, reflecting limited profitability. EBIT and EBITDA margins are also low, suggesting operational challenges. Overall, the income statement reflects moderate growth with profitability concerns.

Balance Sheet

Neutral

The company's debt-to-equity ratio has improved to 2.43 from higher levels, indicating a reduction in leverage, but it remains high. Return on equity is positive at 4.64% TTM, showing some profitability. However, the high debt levels pose a risk to financial stability. The balance sheet reflects a mixed picture with high leverage and moderate equity returns.

Cash Flow

Neutral

Free cash flow growth is strong at 66% TTM, but operating cash flow is negative, indicating cash management issues. The free cash flow to net income ratio is above 1, showing efficient cash conversion, but the negative operating cash flow is a concern. Overall, cash flow performance is mixed with growth in free cash flow but challenges in operating cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	989.98M	676.96M	547.72M	853.29M	849.89M	230.08M
Gross Profit	912.20M	628.83M	508.12M	837.76M	846.61M	222.05M
EBITDA	56.13M	-107.85M	-215.12M	-95.56M	141.27M	8.23M
Net Income	32.21M	-128.58M	-240.13M	-108.67M	135.44M	5.98M
Balance Sheet
Total Assets	2.90B	2.37B	2.02B	1.94B	1.82B	477.25M
Cash, Cash Equivalents and Short-Term Investments	494.89M	793.61M	377.32M	432.41M	994.99M	258.77M
Total Debt	1.90B	1.45B	1.10B	1.09B	795.80M	82.06M
Total Liabilities	2.16B	1.73B	1.38B	1.26B	1.01B	177.00M
Stockholders Equity	743.72M	633.22M	635.30M	672.43M	807.08M	300.25M
Cash Flow
Free Cash Flow	-373.55M	185.49M	-162.02M	-697.59M	153.24M	10.09M
Operating Cash Flow	-367.20M	186.33M	-160.49M	-674.68M	168.35M	15.70M
Investing Cash Flow	-386.82M	-237.73M	-118.45M	-114.13M	-143.88M	136.52M
Financing Cash Flow	935.16M	559.87M	214.27M	130.03M	855.43M	79.05M

Upstart Holdings Technical Analysis

Technical Analysis Sentiment

Positive

Last Price48.12

Price Trends

50DMA

44.47

Positive

100DMA

51.00

Negative

200DMA

54.88

Negative

Market Momentum

MACD

0.49

Positive

RSI

52.51

Neutral

STOCH

43.80

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UPST, the sentiment is Positive. The current price of 48.12 is above the 20-day moving average (MA) of 47.77, above the 50-day MA of 44.47, and below the 200-day MA of 54.88, indicating a neutral trend. The MACD of 0.49 indicates Positive momentum. The RSI at 52.51 is Neutral, neither overbought nor oversold. The STOCH value of 43.80 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
SEZL	80 Outperform	$2.34B	21.23	107.03%	―	88.74%	106.14%
OMF	79 Outperform	$7.70B	11.10	21.41%	6.07%	9.51%	29.38%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
LC	66 Neutral	$2.39B	23.30	7.40%	―	9.68%	94.85%
AFRM	65 Neutral	$24.68B	109.04	7.60%	―	37.00%	―
UPST	55 Neutral	$4.68B	211.24	4.81%	―	73.29%	―
NAVI	48 Neutral	$1.22B	-23.41	-1.95%	4.95%	-25.22%	-174.34%

* Financial Sector Average

Performance Comparison

UPST

Upstart Holdings

48.12

-15.89

-24.82%

NAVI

Navient

12.51

-1.08

-7.95%

LendingClub

20.70

3.66

21.48%

OMF

OneMain Holdings

65.40

13.79

26.72%

AFRM

Affirm Holdings

74.76

18.00

31.71%

SEZL

Sezzle Inc.

68.50

30.21

78.90%

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: Nov 30, 2025