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Here's one AI's view of Upstart's Q3 results. Do you see it different?

Ears <no position, and this is not a recommendation to buy or sell>

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How Upstart Is Doing

Big Growth: In the third quarter of 2025, revenue grew 71% year-over-year, and the company made a $32 million profit.

Strong Demand: More than 2 million people applied for loans — the most in over three years.

New Products Expanding: Auto loans, home-equity lines (HELOCs), and small personal loans are growing fast and now account for over one-fifth of new borrowers.

Improved AI Models: The system became 50% more stable this quarter, reacting more smoothly to changes in the economy.

Plenty of Funding: Upstart added new bank and investor partners, showing continued confidence in its platform.

Challenges to Watch

Too Cautious in Q3: The AI tightened lending after spotting small economic risks, approving fewer loans even as demand surged.

More Loans on Its Books: Upstart now holds about $1.2 billion in loans — higher than normal. This adds risk if borrowers can’t repay.

Uncertain Timing: New product funding deals take time to complete, and competition in lending is intense.

Investor Jitters: The stock price has dropped about 30% in recent months, showing that many investors are still cautious about how quickly Upstart’s business can scale safely.

What the Stock Is Worth

Independent analyses estimate Upstart’s intrinsic value — its long-term “true worth” based on expected profits — between $40 and $50 per share.
The stock recently trades near the middle of that range, meaning the market currently sees it as fairly valued: not a bargain, but not extremely overpriced either.
If Upstart continues to grow steadily and keep credit losses low, the share price could rise over time. But if the economy weakens or its AI misjudges risk again, the stock could fall further.

The Bottom Line

Upstart is trying to reinvent how lending works using artificial intelligence. It’s showing strong progress, renewed profits, and growing products beyond personal loans.
Still, it faces real challenges — economic ups and downs, cautious investors, and the need to prove that its AI can grow safely.

For long-term investors who believe in AI’s future in finance, Upstart could be a high-potential but high-risk opportunity.

Good quarter for Upstart. Glad to see they are firmly profitable again. They guided for full year GAAP earnings of $50m, which would put them around PE 75 at today's market cap.

Not exactly a number associated with a value stock, but if the growth keeps up, UPST will grow into it's valuation within a year or two.

Good to read that small dollar personal loans, auto loans and HELOC are all growing robustly. The market for auto loans and HELOCs is enormous.

The earnings call responses indicate that the cautiousness of the model in the 3rd quarter is more of a feature than a bug: the model tightened up UPST's lending offerings a bit in response to changing economic conditions, since reversed. That reduced volume but presumably boosted profitability of the loans they did write. In retrospect, maybe the tightening wasn't needed, but hindsight is 20/20 and they are happy that their model is reacting quickly to the constantly changing lending and economic environment.

They expect to reduce the amount of loans on the books shortly and they claim to have no shortage of partners ready to make that happen.

Overall, it looks like UPST has managed the turnaround successfully: they are back on track as a profitable, fast growing company serving an enormous market.

The volatility in share price is enormous. I try not to worry about it much, but the recent drop from a share price in the 80s down to the 30s is the second such drop in just one year! I am content with my investment at this price, though I am back underwater from my initial purchase price. It's a trip that they report such good growth and decent profitability only to see the price tank by 20%. I guess if anyone were looking for an entry point, it looks like a good one to me, if you believe in the company and their future.

As usual, my main worry about the company is their heavy, heavy rewards of the insiders. For it to be a good value for run-of-the-mill investors like me, the company will have to grow like hell to overcome that drag.

They've sold about ~$30M YTD.

Diluted shares have increased ~20% since Q3 last year.

Despite the uncertainty with the business, they seem to do a
good job rewarding themselves.

I admire you for sticking with it all these years,
and hope it pays off for you in the future.

Ears

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