Upstart Holdings (UPST) is a lending platform that uses AI to assess the credit worthiness of potential borrowers. Upstart uses machine learning to look at more variables than normal credit-risk assessments, which it says will allow banks to lend to more borrowers with less risk due to the increased accuracy of this method.
How does Upstart make money?
Instead of traditional loan interest and fees, the company collects a referrer fee for connecting borrowers with its network of lenders.
This allows Upstart to be very profitable without much risk.
With $2.35 in estimated earnings per share for 2022, Upstart's stock trades at a forward price-to-earnings multiple of 36.
At the beginning of March, Upstart announced the launch of its Upstart Auto Retail mobile platform. The platform connects buyers to dealer inventory and Upstart’s AI-powered financing. Prior to this mobile-first version, dealer adoption of Upstart Auto Retail had grown 4x in 2021.
Wall Street analysts believe the company is worth over 84% more if the economy does not head into a recession.
Looking into the lucrative business of online lending? Add one of these outcomes to your portfolio: UPST
Source: Investor Place