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Should Investors Worry About Upstart’s Recent 200%?

It’s easy to look at massive gains in a short space of time and end up buying at the top, but it’s just as easy to be suspicious of such moves and miss out. 

This article was originally written by MyWallSt. Read more market-beating insights from the MyWallSt team here.

Is Upstart’s (NASDAQ: UPST) recent run a case of the former or the latter?


Just getting (up)started?

Shares in the financial software vendor closed at a record $164.87 yesterday, marking a 171% jump in just 3 sessions. In fact, since going public in December with a valuation of $2.1 billion, it has gone from strength to strength and is now valued at $12 billion. Many are looking at this recent performance and thinking: 

“Is this GameStop all over again?”

After all, there have been whispers about Upstart on the r/WallStreetBets message board on Reddit. 

Such an assumption could be premature though, as Upstart is enjoying a deserved purple patch right now following an impressive first-ever quarterly earnings call last Wednesday:

  • Revenue: $84.4 million (+39% year-over-year (YoY))
  • Operating income: $10.4 million (~+300% YoY)
  • Adj. EBITDA: +123% YoY
  • Q1 ’21 revenue guidance: $112 million to $118 million (+80%) 

These numbers aside, the real game-changer for Upstart is its acquisition of Prodigy Software, a provider of cloud-based automotive retail software. The almost half-a-trillion-dollar U.S. automotive industry is suffering from a serious lack of buy-now-pay-later opportunities. Through its Prodigy acquisition, Upstart suddenly has a chance to become a leading player in the lucrative space. 

So, before you dismiss Upstart as just another stock caught in ‘the squeeze’ (or before buying solely because you believe it to be a quick buck), you should take a look at its fundamentals and the growth potential for its auto financing business.


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Disclaimer Past performance is not a reliable indicator of future results.

CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.

CMC Markets does not endorse or offer opinion on the trading strategies used by the author. Their trading strategies do not guarantee any return and CMC Markets shall not be held responsible for any loss that you may incur, either directly or indirectly, arising from any investment based on any information contained herein.

*Tax treatment depends on individual circumstances and can change or may differ in a jurisdiction other than the UK.

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