Upstart Holdings (NASDAQ: UPST) has become one of the more embattled stocks on Wall Street. It's made a humongous round trip from $20 per share to $400 and back again in the past couple of years. Volatility can stir up investor emotions, so assessing a business with a clear head is vital.

Upstart is clearly struggling in this economic scenario of rapidly increasing interest rates, and management has admittedly backtracked on some of its plans for its balance sheet. However, some vital clues point toward a brighter future for the company. Here's what you must know about Upstart's challenges and why it's still a compelling long-term investment.

Upstart is a technology company, but it's susceptible to the dynamics of the financial markets. It uses artificial intelligence (AI) instead of a traditional credit score to originate loans. Rather than hold the loans like a regular bank might, it wants to immediately sell those loans to investors, removing the risk from its balance sheet. Upstart is building a network of partner banks and credit unions that work with the company or use its software API to originate their loans.

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Source Fool.com