Upstart Holdings (UPST) is showing signs of a potential recovery after experiencing a significant downturn from its peak of $390 in October 2021 to around $26 today. The AI-driven lending platform, which connects banks and credit unions with borrowers using non-traditional data for loan approvals, faced challenges as rising interest rates curtailed loan volumes and highlighted its financial losses. However, the company returned to profitability in 2025, benefiting from a series of Federal Reserve rate cuts that spurred growth and improved its conversion rates.

The shift in interest rates has been pivotal for Upstart’s business model, which thrives in low-rate environments. With analysts projecting impressive revenue and earnings per share growth rates of 31% and 92%, respectively, from 2025 to 2028, the company appears well-positioned for a rebound. Additionally, its recent application for a U.S. bank charter could pave the way for further expansion.

For market professionals, Upstart’s current valuation—trading at just two times this year’s sales—suggests it may be undervalued, presenting a potential buying opportunity before its growth narrative gains wider recognition.

Source: fool.com