Upstart Holdings is the IBD Stock Of The Day after an earnings beat and raise. On Tuesday, Upstart stock flirted with a buy point after more than tripling in the past year.
Since Feb. 12, 11 analysts have revised quarterly Upstart earnings estimates upward, according to FactSet. Nine analysts raised price targets on Upstart stock as well since then. On Tuesday, Barclays raised its price target on Upstart stock to $93 from $80, according to TipRanks.com.
The company crushed earnings estimates for the fourth quarter on Feb. 12. Importantly, Upstart "came within a whisker of returning to GAAP profitability," CEO Dave Girouard said in an earnings release. It reported a Q4 GAAP loss of $2.8 million, or 3 cents per diluted share. On an adjusted basis, Upstart returned to profitability for the first time in six quarters, with revenue growth accelerating.
Revenue, transaction volume and conversion rates all surged, helping the company to slash losses.
Upstart Stock Retests Buy Point
Shares of Upstart Holdings popped 5.4% in above-average volume on Tuesday. Upstart stock retested an 88.95 buy point from a cup base, according to MarketSurge charts. Shares first cleared that entry in stock market action on Feb. 12 but then fell below it, though holding steady above the 21-day exponential moving average.
The relative strength line hit a high as shares broke out on Feb. 12. It's a bullish sign if the RS line, the blue line in the chart shown, hits a new high as a stock tries to break out. A rising RS line shows a stock's outperformance vs. the S&P 500 index.
On a weekly chart, Upstart's RS line has moved sideways for several years, after diving from a 2021 peak.
A 98 RS Rating means that this financial stock has outperformed 98% of all stocks in IBD's database over the past year.
Upstart Earnings And Outlook
The IBD Stock Checkup tool shows that Upstart stock carries a Composite Rating of 86 out of a best-possible 99. IBD's Composite Rating rolls various fundamental and technical metrics into one easy-to-use score.
Other companies that are transforming the way Americans deal with money can be found in the IBD 50 list of top growth stocks. Those financial stocks include Affirm and Robinhood Markets.
Upstart holds an EPS Rating of 43 out of a best-possible 99. It is a young and fast-growing company with an uneven profit history.
In the latest Q4, revenue surged 56% year over year, with growth accelerating for a second straight quarter. Loan transaction volume rocketed 68%. Conversion rate surged 19%. For 2024 as a whole, the company chopped net losses to $128.6 million from a loss of $240.1 million in 2023.
For 2025, Upstart said it expects revenue of about $1 billion and GAAP net income to be "at least breakeven." Analysts now expect revenue of $991.1 million, a 56% increase from 2024, FactSet shows.
What 'AI Lending Marketplace' Upstart Does
California-based Upstart describes itself as an artificial intelligence (AI) lending marketplace.
The company says it connects more than 3 million customers to more than 100 banks and credit unions. Those institutions leverage Upstart's AI models and cloud applications to deliver home loans, personal loans, auto refinance loans and relief loans, often to consumers from underserved communities.
Upstart says its AI models allow the banks to approve 101% more applicants at 38% lower APRs than traditional models. APR stands for Annual Percentage Rate, which is the yearly cost of borrowing money.
In 2024, the company added 28 new banks and credit unions. It saw 30% sequential growth in loan originations from those bank and credit union partners.
Over the past year, Upstart stock has rocketed 232%, including a 41% jump year to date.
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