Will Upstart's (UPST) New Credit Union Partnerships Offset Concerns About Cash Flow and Debt?

• Upstart Holdings has recently expanded its lending network through new credit union partnerships and is drawing attention ahead of its scheduled earnings report, expected to show a very large increase in earnings per share compared to the same period last year.
• Despite Upstart's innovative AI-powered credit-scoring platform and growth partnerships, concerns remain about negative cash flow, high customer acquisition costs, and debt levels impacting its financial stability.
• We'll examine how rising optimism about Upstart's expected earnings jump and AI platform expansion shapes its current investment narrative.

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Upstart Holdings Investment Narrative Recap

To see long-term value in Upstart Holdings, investors must believe in the company's ability to drive growth by expanding its AI-driven lending platform and forming more partnerships with credit unions. The recent buzz around an expected large earnings-per-share increase in the upcoming report stands as a potential short-term catalyst, but underlying issues like negative cash flow and sizable debt remain the key risks, and the latest news has not materially eased those concerns.

Upstart's recent partnerships with credit unions, such as Cornerstone Community Financial and ABNB Federal Credit Union, are directly relevant. These alliances are designed to broaden lending reach and reinforce Upstart's main growth catalysts ahead of the anticipated earnings surge.

However, beyond the current optimism around earnings, investors should be aware that Upstart's reliance on consistent model accuracy remains a major risk if...

Read the full narrative on Upstart Holdings (it's free!)

Upstart Holdings' narrative projects $1.8 billion in revenue and $337.2 million in earnings by 2028. This requires 27.2% yearly revenue growth and an earnings increase of $343.6 million from current earnings of -$6.4 million.

Uncover how Upstart Holdings' forecasts yield a $79.54 fair value, a 64% upside to its current price.

Exploring Other Perspectives

Seventeen Simply Wall St Community members estimate Upstart's fair value between US$21.91 and US$85 per share, with significantly differing outlooks. Against this backdrop, growing debate centers on whether Upstart's improved underwriting accuracy can offset risks from macroeconomic shifts and financial pressures.

Explore 17 other fair value estimates on Upstart Holdings - why the stock might be worth as much as 75% more than the current price!

Build Your Own Upstart Holdings Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• 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.
• Our free Upstart Holdings research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Upstart Holdings' overall financial health at a glance.

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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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