1 Green Flag and 1 Red Flag for Upstart

It's hard to believe that just last October, Upstart Holdings' (NASDAQ: UPST) stock was sporting a valuation of more than 500 times trailing-12-month earnings. At recent prices, it had toppled to a price-to-earnings ratio of less than 20, which is almost laughable for a growth stock.

Is it undervalued now? Or are there enough challenges that this reflects the true value of the stock? Let's examine it from both angles.

Upstart's business has been growing by leaps and bounds, with explosive revenue growth since it went public -- revenue more than tripled in 2021. Investors went crazy over this stock, but the enthusiasm faded after it posted a negatively received outlook for the 2021 fourth quarter followed by a general tech sell-off in the broader market.

Source Fool.com