Is Upstart the Growth Stock for You?
A seeming multitude of fintech and digital payments companies have made public debuts in the past year. Some are merely trying to take advantage of the hype surrounding the digital economy, but others look like promising long-term growth stocks. Upstart (NASDAQ: UPST) is one of those promising few -- but it's no hidden gem. As of this writing, shares are up an incredible 280% since its December IPO.
The latest quarterly report and a pending acquisition have helped send the fintech company's stock into the stratosphere. Nevertheless, for investors with a very long-term horizon (think five years or more), this is a growth stock worth putting on your radar.
Upstart is trying to rewrite the playbook on consumer credit. For those with a spiffy clean credit score, applying and getting approved for a personal loan is a cinch. Not so much for those with a less-than-stellar credit record using the traditional FICO-based score. However, Upstart points out that 80% of Americans have never defaulted on credit, but nearly half don't have access to prime credit (traditionally defined as one level below super prime, the highest consumer credit rating). Rather than relying on historical data to create a simple scorecard, Upstart uses artificial intelligence (AI) to improve the credit decision-making process and increase access to lending for the masses.
Source Fool.com
