Upstart’s stock price has taken a beating over the past six months, shedding 40.1% of its value and falling to $27.06 per share. This was partly due to its softer quarterly results and may have investors wondering how to approach the situation.
Following the pullback, is now an opportune time to buy UPST? Find out in our full research report, it’s free.
Why Is Upstart a Good Business?
Using over 2,500 data variables and trained on nearly 82 million repayment events, Upstart (NASDAQ: UPST) is an AI-powered lending platform that uses machine learning to help banks and credit unions more accurately assess borrower risk for personal loans, auto loans, and home equity lines of credit.
1. Transaction Volumes Surge as Activity Increases
Total transaction volumes show the aggregate dollar value of loans processed on Upstart’s platform. This is the number from which the company will ultimately collect fees, and the higher it is, the more accurate its software becomes at assessing credit risk.
Upstart’s transaction volume punched in at $3.45 billion in Q1, and over the last four quarters, its year-on-year growth averaged 56.6%. This performance was fantastic and shows the company is capturing significant demand. It also indicates that customers are increasingly using Upstart’s platform to process loans, enabling it to collect more fees and expand into new markets (like credit cards). 
2. Projected Revenue Growth Is Remarkable
Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite, though some deceleration is natural as businesses become larger.
Over the next 12 months, sell-side analysts expect Upstart’s revenue to rise by 34.1%. While this projection is below its 45.4% annualized growth rate for the past two years, it is eye-popping and indicates the market sees success for its products and services.
3. Projected Free Cash Flow Gains to Pump Profits
If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.
Looking forward, analysts predict Upstart will generate cash on a full-year basis. Their consensus estimates imply its free cash flow margin of negative 28% for the last 12 months will increase to positive 6%, giving it more money to invest.
Final Judgment
These are just a few reasons why Upstart ranks near the top of our list. After the recent drawdown, the stock trades at 1.7× forward price-to-sales (or $27.06 per share). Is now a good time to initiate a position? See for yourself in our full research report, it’s free.
Stocks We Like Even More Than Upstart
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Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
