One of the best-performing stocks in recent months is Upstart (NASDAQ:UPST). Over the past two months, UPST stock has nearly tripled, making this one of the best momentum stocks in the market of late.
Why all the momentum?
Well, Upstart’s business model has been intriguing many hypergrowth investors. The company utilizes big data and machine-learning capabilities to improve upon the current credit score system. By taking into consideration a number of factors outside of what credit scoring agencies use, Upstart is able to provide more loans to borrowers. For banks, at a time when lending volumes are down, this is a big deal.
Additionally, Upstart is able to more effectively pinpoint the actual default risk associated with borrowers. Accordingly, lenders are able to be more aggressive with the rates they offer. This is better for consumers, better for lenders and better for investors in UPST. Indeed, as a company that takes a slice out of every transaction, this company stands to benefit as volumes across its platform increase.
Today, there’s some rather bullish news on this front taking UPST stock higher. Let’s dive into what investors are focusing in on today.
Another Partnership Powering UPST Stock Higher
This partnership is just the latest in a string of deals between lenders looking to boost their volumes and improve their rates, and Upstart. Accordingly, investors seem to be factoring in rather impressive growth as a result of this deal. As more partnerships are announced, investors expect to see margins and cash flows increase for Upstart. After all, this is a high-margin product with excellent operating leverage that’s only starting to get traction now.
WSFS has noted that Upstart brings the potential for digital-friendly customer experiences as well as a more diverse customer base. Both parties seem excited by this deal, and rightfully so. Should Upstart continue to impress its core clientele and build a substantial book of business, the sky could be the limit for this company. At least, investors hope so.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.