Upstart
| CURRENT PRICE | PROBABILITY-WEIGHTED FAIR VALUE | FAIR VALUE RANGE |
|---|---|---|
| ~$48 | ~$45 | $25 – $75 |
| May 2026 | Bull 25% / Base 50% / Bear 25% | Approximately fair; PT $45 |
Verdict: UPST delivered Q1 2026 revenue of $308M (+44% YoY) and originations of $3.4B (+61%)[1], though net loss widened to $6.6M. Contribution margin compressed to 50% from 55%. Management maintained FY26 outlook of $1.4B revenue with $294M Adj EBITDA (21% margin)[2]. The thesis hinges on (1) rate-cycle improvement enabling more lending and (2) AI model differentiation versus traditional FICO underwriting. Consensus PT is $45, roughly matching current price.
CURRENT SNAPSHOT
| Metric | Value | Notes / Source |
|---|---|---|
| Stock price | ~$48 | [3] |
| Q1 2026 revenue | $308M (+44%) | Originations +61% [1] |
| Q1 2026 net loss | ($6.6M) | Wider than Q1 2025 [1] |
| Q1 2026 contribution mgn | 50% | Down from 55% [1] |
| FY26 revenue outlook | ~$1.4B | [1] |
| FY26 Adj EBITDA outlook | $294M (21% mgn) | [1] |
| Forward P/E | 10.6x | Trailing 65x [4] |
| Consensus PT | $45 | 22 analysts; range $20-$80 [4] |
BULL / BASE / BEAR SCENARIOS
| Scenario (weight) | Assumptions | Fair Value |
|---|---|---|
| Bull (25%) | Rate cuts drive origination growth +80%+, contribution margin recovers to 55%, multiple expands | $75 |
| Base (50%) | Hit FY26 outlook, originations +50%, contribution margin steady 50%, 17x forward P/E | $45 |
| Bear (25%) | Credit losses spike, originations grow only 30%, contribution margin <45% | $25 |
| Probability-weighted | Rate-sensitive AI lender; binary outcomes depending on credit cycle and Fed path. | ~$45 |
Key Risks
- Credit risk: AI model performance has been mixed; loss rates above traditional models in stress periods.
- Funding capacity: Reliance on institutional buyers for loans; capacity constraints during volatility.
- Bank charter: National bank charter pending; approval and integration are 2027 events.
- Rate sensitivity: Higher rates compress both demand and unit economics simultaneously.
What Would Change Our View
- Upside: Bank charter approval, Fed rate cuts of 75bp+, contribution margin recovery to 55%.
- Downside: Q2 originations miss, credit losses spike, funding capacity tightens, regulatory action.
Sources
[1] https://www.stocktitan.net/news/UPST/upstart-announces-first-quarter-2026-tt6aqny7vecq.html
[2] https://www.sec.gov/Archives/edgar/data/0001647639/000164763926000045/upst991prq12026.htm
[3] https://finance.yahoo.com/quote/UPST/
[4] https://stockanalysis.com/stocks/upst/statistics/
Disclaimer
This output is for informational and research-assistance purposes only. It does not constitute investment, legal, tax, accounting, or other professional advice, and it is not a recommendation to buy, sell, or hold any security. Verify material facts independently and consult qualified advisors before making decisions.