1 Potentially Huge Catalyst Is Coming for Upstart -- and It's Not Earnings
While lending specalist Upstart Holdings (NASDAQ: UPST) will report earnings results for the first quarter of the year in a few weeks, earnings are actually not the catalyst at the heart of this article. Yes, earnings will be a catalyst (they almost always are), but one longer-term catalyst that investors should be paying close attention to is the company's first asset-backed securities (ABS) issuance in 2022 and how it performs. The performance of this ABS has the potential to send the stock significantly up or down. Here's why.
Upstart claims to have developed artificial-intelligence loan underwriting algorithms that can assess the true credit of borrowers better than traditional underwriting methods such as Fair Isaac's (NYSE: FICO) FICO scoring, which has been around for decades. So far, Upstart has applied its model to the personal loan market and has recently rolled it out to the auto loan market as well, with plans to launch into other lending markets. The success of Upstart will be determined by how well its underwriting algorithms perform.
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Source Fool.com
