Upstart (NASDAQ: UPST) is likely one of the more frustrating growth stocks currently trading. Its AI-driven business model sent its stock higher in 2021 amid speculation that it could replace Fair Isaac Corporation's widely used FICO score.
However, seeing a now-shrinking business, its stock has lost about 97% of its value. The question for investors is whether one key struggle the company faces can outweigh the promise of its credit-scoring model.
One criticism of Upstart before interest rates rose was the lack of a stress test on its model. Now, with the rising-rate environment here, the model, and by extension, the company, have to prove themselves.
Source Fool.com