It’s funny how Wall Street can love a company for a while and then abandon it. That seems to be what’s happened with Upstart (NASDAQ:UPST), as UPST stock recently traded at prices investors haven’t seen since the summer of 2021.
That doesn’t negate the fact that early-stage investors have earned robust returns. Indeed, UPST shares are still up substantially since the company went public.
If you sat on the sidelines since July however, you’re in luck. It’s not every day that you get a second chance in the financial markets, but you might just have one with UPST stock. So let’s assess the damage and see if there really is a bargain to be had here.
As Upstart continues to challenge traditional lenders, open-minded investors might have a rare opportunity to capitalize on a temporary dip in a longer-term uptrend.
UPST Stock at a Glance
There’s no denying it: Upstart’s earliest investors really made a killing.
Going back to where it all started, Upstart’s initial public offering (IPO) took place on Dec. 16, 2020, after the company priced its offering at $20 per share.
UPST stock’s first trade on the Nasdaq Exchange was for $26, but it didn’t stay there for long. Believe it or not, the stock ran up to $100 in February of 2021. It then sailed to $200 in August and $400 in October.
After a run-up of that magnitude, it’s only natural for a stock to pull back. So, there’s really no need to panic-sell just because UPST stock came back down to the $120s.
If anything, this is exactly the kind of chance patient investors have been waiting for. People who have been waiting to start up a position in Upstart, can now get in at an appealing price point.
Can’t Argue with These Numbers
There’s simply no denying that Upstart is moving on the right fiscal track. For any doubters out there, Upstart CEO Dave Girouard offers some persuasive data points from his company’s third-quarter 2021 fiscal report:
“Since Upstart’s IPO a year ago, we’ve more than tripled our revenue, tripled our profits, tripled the number of banks and credit unions on our platform, and tripled the number of auto dealerships we serve,” Girouard observed.
Not only that, but Upstart reported $228 million in total Q3 2021 revenue, representing a year-over-year increase of 250%. Even the biggest skeptics would be hard-pressed to argue with that.
But while Upstart is pulling in huge revenues, the company is also not-so-quietly disrupting traditional lending as we know it.
For instance, Upstart is partnering with the National Bankers Association to improve access to affordable credit for customers of minority-owned depository institutions.
Closing the Wealth Gap
Old, stodgy, prohibitive lenders probably won’t like this at all. Upstart’s AI lending platform will offer diverse communities access to credit, in many cases when other financial institutions will not.
Clearly, Upstart is committed to acting locally in order to make changes globally.
By providing smaller loan amounts, Upstart and the National Bankers Association can help borrowers to potentially build their credit ratings and recover from short-term setbacks.
Plus, borrowers won’t be subjected to exorbitant interest rates from some other lenders. Sure, Upstart will probably steal some market share from predatory lenders, but that’s certainly a good thing.
Nat Hoopes, vice president and head of public policy and regulatory affairs at Upstart, further clarified how this initiative can move beyond profit motives into more enduring and meaningful outcomes.
“By providing more access to credit within low-to-moderate income communities, [the National Bankers Association’s] minority-owned banks play a critical role in helping to close the racial wealth gap in America,” Hoopes explained.
As you can see, Upstart isn’t your typical lending institution. To be honest, some of the fat cats at the bigger lending institutions probably don’t like Upstart very much.
But the folks at Upstart probably wouldn’t have it any other way. Disruption can be necessary, and Upstart’s unafraid to take on the powers that be in the lending market.
As for UPST stock, you can choose to panic or to seize the opportunity. Just be aware that if the stock recovers, the rally could be swift and powerful.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
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