UPSTART HOLDINGS INC | UPST

May 10, 2022

Innovation | Technology

UPST EPS takeaways | 5/10/22

  • Leader in AI lending
  • Car dealerships now along with banks / credit unions
  • CEO confirming consumer credit conditions are deteriorating at an aggressive rate
  • This is expected and due to 2yr note rapid rise in rates
  • CEO expects it to get worse as Fed continues on its path
  • So far this is not a company issue but instead an economy issue
  • Increased balance sheet risk and the Street won’t like that
  • Delinquencies on the rise after pandemic gov’t payments went away. This was expected
  • Companies business model struggles a bit when rates move up this fast
  • Using their balance sheet to fund deals as the platform lags and this is a new risk that is probably why the stock is down 56% today
  • Management admitting their AI model can’t keep up with the rapidly moving rates
  • This company is a casualty of the unprecedented move in 2yr rates. The balloon has been squeezed and this company is the bulge on the other side
  • Lending system is seizing up. This is a major problem for the economy
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