Upstart Holdings Hits 55% Rating Among Growth Strategies

According to a recent report, Upstart Holdings Inc achieves a 55% rating using the Small-Cap Growth Investor model. While it excels in insider holdings and some other criteria, failures in profit margins, sales growth, and cash flow invite investor caution.

Date: 28-11-2024

AI Rating: 4

Overview of Upstart Holdings Inc: The report indicates that Upstart Holdings Inc (UPST) is positioned as a mid-cap growth stock within the Consumer Financial Services sector. Its rating of 55% demonstrates that while the fundamentals somewhat support its growth potential, several weaknesses exist that could deter investors.

Profit Margins: The company fails to meet the profit margin criteria, signaling potential issues with profitability that could lead to downward pressure on stock prices. Investors typically prefer stocks that exhibit healthy profit margins, as they reflect a company's ability to efficiently convert revenue into profit.

Sales and EPS Growth: The report notes a failure in comparing sales and EPS (Earnings Per Share) growth to the same period last year, indicating that Upstart is not improving its earnings or sales at a desirable pace. This lack of growth could be perceived as a negative signal for current and prospective shareholders, leading to lower investor confidence.

Cash Flow from Operations: Additionally, cash flow from operations is marked as a fail. This suggests that the company may be having difficulty generating cash from its core business operations, which could impact its ability to reinvest in growth or return value to shareholders.

Insider Holdings: On a positive note, insider holdings pass the criteria, showcasing management's confidence and potential alignment with shareholder interests. However, this is not sufficient to offset the significant weaknesses noted above.

Other Highlights: Although there is some positivity around cash and cash equivalents, daily dollar volume, and income tax percentages are fail points as well, which further contributes to the uncertainty surrounding UPST's financial health.

In conclusion, the multitude of failures in key growth and profitability metrics presents substantial risks for investors. Given these financial indicators, an investor may tread carefully regarding their involvement with Upstart Holdings.

Stocks: UPST