Upstart Stock: Buy, Sell, or Hold in 2022?

Upstart Holdings (NASDAQ: UPST) made a splash in 2021, entering the markets in December 2020 to a mild start before climbing more than 750% by October 2021. The excitement has cooled, but the fintech's stock still gained about 280% for the year. Management's expectations for 2022 are curbing some enthusiasm as well. What should investors do this year?

There are many reasons to love Upstart. It has real disruptive potential in its artificial intelligence-powered credit-evaluation platform, an alternative to the traditional FICO scoring model that groups people into boxes and denies credit to millions of potentially reliable borrowers. Upstart challenges that by running loan applicants' information through thousands of data points that assess their personal creditworthiness. It uses many more variables than the standard rating system, such as employment history and education, leading to more approvals while more accurately quantifying risk to the lender.

The company says that 80% of Americans have never defaulted on a loan, but less than half have access to the most favorable interest rates. Getting loans to those "missing million" provides more equity in the marketplace and more business for banks.

Source Fool.com