Upstart Holdings Inc. (#UPSTART) weekly special report based on 1 Lot Calculation:
UPSTART: THE COMPANY
- Upstart is a leading artificial intelligence (AI) lending platform designed to improve access to affordable credit while reducing the risk and costs of lending for their bank partners. The platform uses sophisticated machine learning models to more accurately identify risk and approve more applicants than traditional, credit-score based lending models.
UPSTART: BUSINESS MODEL
- BUSINESS MODEL: According to the Lendingtree.com, Upstart connects consumers with lenders on its online platform using artificial intelligence (AI). Borrowers can expect quick loans, competitive annual percentage rates (APRs) and flexible amounts. According to Motley Fool, the main objective of the company is to increase access to credit for those consumers who might not be approved if they went through the traditional lending route. And by looking at unique data points, like education and employment, Upstart believes it can better gauge a borrower's creditworthiness.
- UPSTART AND ARTIFICIAL INTELLIGENCE (A.I.): The company uses a platform based on A.I. to analyze over 1,000 different variables about borrowers regarding their lending decisions. With Upstart, credit unions can approve over 43% more borrowers than traditional credit score-based models with low default rates.
- HOW DOES UPSTART MAKE MONEY: FEES FROM ITS LENDING PARTNERS AND INSTITUTIONAL INVESTORS. Upstart helps their lending partners to identify bigger number of borrowers that at the end of the day will be able to repay their loans and all that by using a sophisticated A.I. platform. Upstart does that for fees.
UPSTART: EVENTS
- EVENT (TUESDAY, FEBRUARY 11, AFTERMARKET): Q4 EARNINGS REPORT. The company is expected to print $180.2 million in revenue (a new record high), up 11.16% from Q3’s $163.1 million, and up around 28.4% from the same period last year ($140.3 billion). The company is expected to report a net loss of $4.4 million, which is much lower than the one from Q3 ($45.8 million of net loss) and then the one from the same period last year ($28.5 million of net loss). FORWARD GUIDANCE (Q1): The company is expected to project $183.4 million for Q1 of 2025 and first ever quarterly net income of $1.5 million.
- REVENUE AND EARNINGS PERFORMANCE (LAST 8 QUARTERS): UPSTART TENDS TO BEAT ESTIMATES. The company has beaten Earnings Per Share (EPS) estimates 7 times over the past 8 quarters, while its revenue has managed to beat estimates 6 times over the past 8 quarters.
- LAST TIME (Q3 EARNINGS RELEASED ON NOVEMBER 7, 2024, AFTERMARKET): Upstart reported higher than expected revenue for Q3 ($163.1 million vs. $150.36 expected) and lower than expected Loss Per Share (-$0.06 vs -$0.135 expected). STOCK PERFORMANCE ON NOVEMBER 8, 2024: The stock rose 46.02%.
Please note that past performance does not guarantee future results
UPSTART: BUSINESS DEPENDS ON INTEREST RATE ENVIRONMENT
- FALLING INTEREST RATE ENVIRONMENT IS POSITIVE FOR UPSTART’S BUSINESS: Upsart’s business is more successful when general rates and loan interest rates are lower, which tends to increase demand for loans. Lower interest rate environment tends to increase the borrowing-lending activity, therefore, this could increase demand for Upstart’s services, which in turn, could increase Upstart’s revenue stream and its earnings figures.
- PREVIOUS INTEREST RATE CUT CYCLE (JULY 2019 – MARCH 2022): US INTEREST RATES FELL FROM 2.50% TO 0.25%; UPSTART STOCK ROSE TO A FRESH ALL-TIME HIGH OF $401.49 BY LATE 2021. This increase was up from Upstart’s Initial Public Offer (IPO) price of $20 a share on December 18, 2020.
- CURRENT INTEREST RATE CUT CYCLE (SEPTEMBER 18, 2024- ONGOING): US INTEREST RATES FELL FROM 5.50% TO THE CURRENT 4.50%; UPSTART HAS RISEN BY AROUND 73% SINCE THEN. The Upstart stock has risen from $36.46 on September 18, 2024 to the current $63, marking an increase of around 73%.
UPSTART: RECENT PRICE ACTION
- UPSTART STOCK HAS TRADED AROUND 84% BELOW ITS ALL-TIME HIGH $401.49 (OCTOBER 15, 2021): Upstart hit an all-time high of $401.49 (October 15, 2021). The stock currently trades around $63 and if a full recovery to its recent all-time highs takes place then it can offer an upside of around 540%. However, the stock price could decline as well.
- ANALYST OPINION: Needham forecasts $100; Mizuho forecasts $90; Citigroup forecasts $87; Piper Sandler forecasts $85.
#UPSTART, FEBRUARY 4, 2025
Current Price: 63
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UPSTART |
Weekly |
|
Trend direction |
|
|
120 |
|
|
100 |
|
|
80 |
|
|
47 |
|
|
43 |
|
|
40 |
Example of calculation based on weekly trend direction for 1 Lot1
|
UPSTART |
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|
Pivot Points |
||||||
|
Profit or loss in $ |
28,500 |
18,500 |
8,500 |
-8,000 |
-10,000 |
-11,500 |
|
Profit or loss in €2 |
27,567 |
17,894 |
8,222 |
-7,738 |
-9,673 |
-11,123 |
|
Profit or loss in £2 |
22,939 |
14,890 |
6,842 |
-6,439 |
-8,049 |
-9,256 |
|
Profit or loss in C$2 |
41,104 |
26,682 |
12,259 |
-11,538 |
-14,423 |
-16,586 |
1. 1.00 lot is equivalent of 500 units
2. Calculations for exchange rate used as of 13:00 (GMT) 04/02/2025
There is a possibility to use Stop-Loss and Take-Profit.
- You may wish to consider closing your position in profit, even if it is lower than suggested one.
- Trailing stop technique could protect the profit.