UPST stock pick in the 7-day projection returned a 26.41% profit, opening at $13.29 and closing a week later at $16.80.
Just a week ago, our AI-based stock forecast on March 29th, 2023, declared Upstart Holdings, Inc (UPST) as a buy, resulting in a 26.41% profit. UPST is a fintech company with a unique approach to lending that has been successful in attracting consumers who are traditionally underserved by traditional lenders. As a subscriber, you can identify more opportunities by monitoring regularly recurring stock picks from the AI forecasts released each morning EST.
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Above, you can see our signal for UPST, a stock pick in the 7-day (weekly) projection on March 29th, 2023. The opening price on the date of the forecast was $13.29 and closed a week later at $16.80 returning a 26.41% profit.
UPST: Employing AI to Enhance Efficiency
Founded in 2012 and headquartered in San Mateo, California, UPST provides consumers with access to personal loans, auto loans, and credit cards. It does business with a diverse range of lending partners, including banks, credit unions, and finance companies. While UPST has had its fair share of challenges, it has also recorded remarkable successes in its relatively short existence. Notably, the company has been able to leverage the power of artificial intelligence (AI) to develop a robust and efficient lending platform that provides borrowers with a more personalized and streamlined loan application process. Through its use of AI, UPST has been able to minimize the impact of traditional lending factors such as credit scores, income, and employment history, allowing for greater access to credit for consumers who would typically be overlooked by traditional lenders.
Despite this, UPST continues to face significant challenges in the highly competitive fintech industry. As demonstrated in the company's financial highlights for the fourth quarter and fiscal year 2022, UPST experienced a decrease in revenue and transaction volume, as well as a decline in the conversion rate for rate requests. This decrease can be attributed to factors such as increased competition in the fintech space and the ongoing impact of the COVID-19 pandemic on consumer spending and borrowing behavior.
From its most recent financials posted the company has made some noteworthy achievements in the 2022 fiscal year, including an increase in total fee revenue and contribution profit. The company's contribution margin also remained relatively stable, and it repurchased millions of shares worth millions of dollars, demonstrating a commitment to returning value to shareholders. Let's take a deeper dive into this these financials:
UPST Financials
Revenue
Total revenue in Q4 2022 was $147 million, a decline of 52% compared to Q4 2021. The total fee revenue in Q4 2022 was $156 million, a decrease of 46% year-over-year. However, the total revenue for the fiscal year 2022 was $842 million, a slight decrease of 1% compared to the prior year. The total fee revenue for the fiscal year 2022 was $907 million, an increase of 13% year-over-year.
Transaction Volume and Conversion Rate
In Q4 2022, lending partners on Upstart's platform originated 154,478 loans, totaling $1.5 billion, down 62% from the same quarter of the prior year. Conversion on rate requests was 11% in Q4 2022, down from 24% in Q4 2021. For the entire fiscal year 2022, lending partners originated 1,129,672 loans, totaling $11.2 billion, down 5% from the prior year. Conversion on rate requests was 14% in the fiscal year 2022, down from 24% in the prior year.
Income (Loss) from Operations and Net Income (Loss) and EPS
Income (loss) from operations in Q4 2022 was ($58.5) million, down from $60.4 million in the prior year. GAAP net income (loss) in Q4 2022 was ($55.3) million, down from $58.9 million in Q4 2021. Adjusted net income (loss) in Q4 2022 was ($20.9) million, down from $87.0 million in the same quarter of the prior year. Accordingly, GAAP diluted earnings per share in Q4 2022 was ($0.67), and diluted adjusted earnings per share was ($0.25) based on the weighted-average common shares outstanding during the quarter. For the entire fiscal year 2022, income (loss) from operations was ($113.9) million, down from $140.9 million in the prior year. GAAP net income (loss) in the fiscal year 2022 was ($108.7) million, down from $135.4 million in 2021. Adjusted net income in the fiscal year 2022 was $19.4 million, down from $224.1 million in the prior year. Accordingly, GAAP diluted earnings per share in the fiscal year 2022 was ($1.31), and diluted adjusted earnings per share was $0.21 based on the weighted-average common shares outstanding during the year.
Contribution Profit and Adjusted EBITDA
Contribution profit in Q4 2022 was $82.0 million, down 45% year-over-year, with a contribution margin of 53% compared to a 52% contribution margin in the same quarter of the prior year. Adjusted EBITDA in Q4 2022 was ($16.6) million, down from $91.0 million in the same quarter of the prior year.
UPST 7-Day Stock Prediction
Our AI-driven stock prediction system conducts an in-depth analysis of historical financial market anomalies attributed to trader overreaction and underreaction, generating daily forecasts in various timeframes from the short-term to long-term time horizons. Not only does the growthtech.ai analytics give you stock recommendations but it also gives you Signal Confidence (SC). Based on the historical accuracy of each prior financial asset forecast as well as current market variables important to stock price, which is stated as a percentage out of 100%. In this stock prediction, the Signal Confidence (SC) is 37%.
Stock Ticker | Open: Mar 29, 2023 | Close: Apr 5, 2023 | ROI% |
Upstart Holdings, Inc (UPST) | $13.29 | $16.80 | 26.41% |
Typically, long-term forecasts are more precise, and they generate greater profits, which is why our AI trading signals are optimal for value-based investors. When combined with machine learning, these incredibly intricate mathematical functions for statistical programming and modeling are capable of comparing their current coefficients and algorithms to newly added data and then adapting to improve the models' accuracy through a process of validation and reflection.
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Sources: 1. Upstart Investor Relations, "Upstart Announces Fourth Quarter and Full Year 2022 Results" (2023)
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