Upstart Holdings Inc

Upstart Holdings, Inc. (NASDAQ: UPST) is an artificial intelligence (AI) lending marketplace. The Company’s platform includes personal loans, automotive retail and refinance loans, home equity lines of credit (HELOCs), and small dollar loans. It applies artificial intelligence models and cloud applications to the process of underwriting consumer credit. Its AI marketplace connects consumers with its lending partner. 

Recent Business and Financial Updates

• Strong Business Growth in Q4 2024: Upstart experienced significant growth across all product categories in the fourth quarter of 2024. Total revenue surged by 56% year-over-year (YoY) to USD 219 million, with total fee revenue reaching USD 199 million, reflecting a 30% YoY increase. The company originated 245,663 loans, totaling USD 2.1 billion, representing a 68% YoY and 33% quarter-over-quarter (QoQ) growth. The conversion rate improved substantially to 19.3%, compared to 11.6% in Q4 2023.
• Profitability and Operational Efficiency: Upstart made considerable progress toward profitability, with income from operations improving from a loss of USD 47.5 million in Q4 2023 to a reduced loss of USD 4.8 million in Q4 2024. GAAP net loss improved to USD 2.8 million, a significant recovery from a USD 42.4 million loss in the prior year. Adjusted net income showed a positive turnaround, reaching USD 29.9 million, compared to an adjusted net loss of USD 9.7 million in Q4 2023. Contribution profit increased to USD 122 million, while adjusted EBITDA reached USD 38.8 million, demonstrating a strong financial rebound.
• Full-Year 2024 Performance: For the full year 2024, Upstart recorded total revenue of USD 637 million, marking a 24% YoY growth. Loan originations totaled USD 5.9 billion, a 28% YoY increase, with the conversion rate rising to 16.5%. Income from operations improved from a loss of USD 257 million in 2023 to a reduced loss of USD 173 million in 2024. GAAP net loss narrowed to USD 129 million from USD 240 million, while adjusted net loss improved to USD 17.8 million from USD 46.9 million. Contribution profit reached USD 382 million, and adjusted EBITDA turned positive at USD 10.6 million.
• Financial Outlook for 2025: Upstart’s guidance for Q1 2025 reflects continued growth and financial improvement. The company expects revenue of approximately USD 200 million, fee revenue of USD 185 million, and adjusted EBITDA of USD 27 million. GAAP net loss is projected at USD 20 million, with an adjusted net income of USD 16 million. For the full year 2025, Upstart anticipates reaching USD 1 billion in revenue and achieving at least breakeven GAAP profitability. The company also expects an 18% adjusted EBITDA margin, highlighting its efforts toward sustainable financial performance.
• Technological Advancements and AI Day Event: As part of its strategic initiatives, Upstart will host “Upstart AI Day” on May 14, 2025, in New York City. The event will provide insights into the company’s AI-driven lending technology, business model, and future strategies. The leadership team will discuss key advancements and innovation in AI lending, further reinforcing Upstart’s position as a leader in AI-powered financial services.

Technical Observation (on the daily chart):

The Relative Strength Index (RSI) over a 14-day period stands at a value of 72.65, currently upward trending and inside bought zone, with expectations of a consolidation or an upward momentum if USD 90- USD95 is broken on the upside. Additionally, the stock's current positioning is above both the 50-period SMA and 200-period SMA, which may serve as dynamic short to medium-term support levels.

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘WATCH`’ rating has been given for Upstart Holdings, Inc. (NASDAQ: UPST) at the current price of USD 87.08 as of February 12, 2025, at 08:40 am PST.

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is February 12, 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level that the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the New York Stock Exchange (NYSE), NASDAQ Capital Markets (NASDAQ), and or REFINITIV. Typically, all sources (NYSE, NASDAQ, or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.