Warning: This Skyrocketing Stock Has a Hidden Risk
Since the start of 2023, shares of Upstart (NASDAQ: UPST) have soared 135%, as optimism about the artificial intelligence (AI)-based lending platform has had a boost from the investment community. Maybe the possibility of a strong economic backdrop in 2024 has been driving the gains.
This fintech stock has no doubt skyrocketed in recent times. But before rushing to add Upstart to your portfolio, investors must be aware of a hidden risk that is impacting the business.
Upstart was registering remarkable growth a few years ago, when the Federal Reserve was much more accommodating and kept interest rates low. Revenue jumped 42% in 2020 and 264% in 2021. And in that latter year, net income was up 2,150%, totaling $135 million. What's more, loan volume in 2021 of $11.8 billion increased 338% year over year.
Source Fool.com
