Upstart Holdings (UPST): A Fresh Look at Valuation Following Credit Union Partnership and Growth Guidance

Upstart Holdings (UPST) just unveiled its partnership with Corporate America Family Credit Union to broaden its suite of lending products. This move, along with improving guidance and upbeat investor sentiment, has caught the market’s attention.

See our latest analysis for Upstart Holdings.

Investor optimism is on the rise for Upstart Holdings, with its new credit union partnership and promising growth guidance leading to a sharp rebound in sentiment. While the share price lost ground in recent months, a three-year total shareholder return of 120% shows the longer-term momentum remains genuinely impressive.

If this turnaround story has you curious about what else is out there, now is a perfect moment to broaden your search and discover fast growing stocks with high insider ownership

But with shares rallying, the key question remains: does Upstart Holdings still represent an overlooked value, or has the market already priced in its anticipated recovery and new growth trajectory?

Most Popular Narrative: 30.6% Undervalued

According to the most widely tracked narrative, Upstart Holdings appears meaningfully undervalued compared to its estimated fair value. The last close at $52.36 sits well below the narrative's fair value of $75.46, suggesting the market is not fully pricing in the company’s projected turnaround.

The implementation of Model 19, featuring the Payment Transition Model (PTM), has improved underwriting accuracy. This improvement is likely to enhance loan approval rates and reduce default risks, which could positively impact revenue and net margins. Upstart's HELOC product growth, driven by conversion improvements, cross-selling, and state expansion, positions it well for future revenue growth and margins. The company may also leverage its strong relationships with banks and credit unions for cost-effective funding.

Read the complete narrative.

Want to see what’s fueling this big gap between value and price? The narrative is built around rapid growth projections and margin leaps, setting a lofty benchmark for Upstart. Find out what bold assumptions about future earnings and profitability power this valuation. There’s more under the surface than you might expect.

Result: Fair Value of $75.46 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, rising delinquency rates or misjudged default risks could quickly weaken confidence in Upstart Holdings' turnaround and future profitability.

Find out about the key risks to this Upstart Holdings narrative.

Another View: Industry Multiples Signal a Caution

Looking from a different angle, Upstart Holdings is trading at a price-to-sales ratio of 5.7x, which is far above both the peer average of 3.7x and the US Consumer Finance industry average of just 1.6x. Even compared to the fair ratio of 4.6x, the current valuation appears rich, hinting at some risk if the market reverts to more typical pricing. Could this premium be justified by future growth, or is the market simply getting ahead of itself?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Upstart Holdings Narrative

If you see things differently or want to dig into the numbers yourself, you can craft your own perspective in just a few minutes, so why not Do it your way

A great starting point for your Upstart Holdings research is our analysis highlighting 1 key reward and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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