Biotech2k
Biotech Investor, AI-Driven Drug Discovery
Upstart's earnings look very strong, so a continued selloff looks like a buying opportunity unless something serious was missed. Nearly all of the bottom-line miss came from heavy sales and marketing spending to drive adoption of its new home loans business, spending that serves long-term investors rather than impressing day traders. x.com x.comÂ
Upstart's AI underwriting flywheel drives growth: more training data makes its models more accurate, lifting approvals and lowering borrower rates. A 2025 internal study found it approves 43% more borrowers at 33% lower APRs than credit-score models. In 2025 auto originations grew about 4x, HELOC about 5x, and revenue hit $1.0B (+64%) with a return to profit. Fair value is closer to $40. Risks: consumer-credit downturns, top three partners at 83% of volume, model error and regulation. x.comÂ
Upstart should make a big comeback once interest rates come down, since high rates are what really hurt the stock. x.comÂ
Upstart offers a second chance to follow insider buying. In May the director and CEO bought $6.5M of stock combined at around $25-27; shares rebounded as high as $37 and have since round-tripped back to about $27. x.comÂ
Upstart has no AI underwriting moat; it is simply winning fewer personal-loan customers in a higher-rate environment while spending heavily. Originations rose 61% to $3.4 billion on auto (+300%) and home (+250%) with personal loans flat, but it returned to a GAAP net loss as contribution margin fell to 50% from 55% and operating expenses rose 45% to about $316 million. If the 10-year stays above 4.4%, a 55x P/E faces brutal valuation gravity, though hitting the $294M EBITDA guide would help. … Show more
Better Home & Finance remains unattractive because it lost $206 million on $108 million of revenue in 2024, nearly $2 lost per dollar brought in, and has lost over $1.5 billion since 2022. Those losses drove the bearish view despite Eric Jackson's claim it could be a 350-bagger. x.comÂ
Upstart remains weighed down by worries over delinquency rates despite growing numbers, because it relies solely on lending. A safer route is fintech companies that don't depend only on lending, where investors feel more confident. x.comÂ
Upstart has zero moat, and a lending platform supposedly so much more efficient than traditional methods should not be losing money. @mukund notes it is intentionally burning capital to blitz-scale into home and auto lending, and that at a 55x P/E, a 10-year yield above 4.4% is a brutal headwind. x.comÂ
