After its initial public offering in December 2020, shares of lending platform Upstart (NASDAQ: UPST) soared more than 1,200% during the next 10 months to hit a peak of $390 in October 2021. But since then, it has been on a monumental decline. The stock is down a whopping 96% in the past 14 months, and the business now finds itself in small-cap territory with a market value of just $1.3 billion.
Is this beaten-down fintech stock a buy right now? Let's take a look.
There's no doubt that Upstart's business model has the potential to disrupt the lending industry. The company offers its 83 different partners (banks and credit unions) an artificial-intelligence (AI) platform that analyzes thousands of data points about potential borrowers before making a lending decision. Compared to the traditional Fair Isaac FICO model, which many consider outdated, the platform has been shown to improve approval rates, while at the same time lowering defaults -- a lucrative combination for lenders.
Source Fool.com