Will Upstart Stock Recover and Go Up?

Where Will Upstart Stock Be in 5 Years

Upstart stock crashed all the way from $394 at its peak during the 2021 bull run due to rising interest rates and a slowdown in loan volume.

Many investors are wondering whether Upstart stock will recover and go back up to around $400 again. The truth is UPST stock performs well in lower interest rate environments so the Fed rate hikes are bearish for the company.

Will Upstart Stock Recover?

I believe UPST stock will be worth over $500 as more borrowers apply for loans on the platform due to its revolutionary AI lending technology. Upstart makes it easy for anyone to get a loan regardless of their credit score.


More banks may use Upstart to increase their loan volume in the future, which is extremely bullish for the company’s bottom line.

Upstart’s Total Number of Bank and Credit Union Partners Must Increase

Upstart makes money every time a borrower receives a loan on its platform. The company partners with banks to act as the middlemen in the credit lending process.

QuarterBank and Credit Union Partners
Q2 202125
Q3 202131
Q4 202142
Q1 202257
Q2 202271
Source: Upstart IR

However, the Fed raised interest rates and made it more expensive for borrowers to make monthly loan payments. Thus, Upstart experienced a downtrend in loan volume during Q2 and Q3 2022. The company lowered its revenue guidance as it adjusts to a higher interest rate environment.


But I don’t believe the Fed will continue raising interest rates in 2023. The September CPI inflation data showed that core inflation only rose 0.1%. That’s a good sign that the Fed will Uturn and stop raising interest rates next year.

AI Lending Could Help Upstart Grow Exponentially

According to SeekingAlpha, Upstart’s revenue will be flat over the next few years. I disagree because the company has grown the total loans offered over the last several quarters and continued to embrace AI technology as a better alternative to traditional credit scores.

QuarterTotal Borrowers Served
Q2 20211.1 million
Q3 20211.4 million
Q4 20211.8 million
Q1 20222.1 million
Q2 20222.4 million
Source: Upstart IR

Let’s assume that Upstart will become profitable again once the Fed lowers interest rates within the next 18 months. That means net income could increase and the company could experience a flywheel effect, which means much higher revenue and net income.


Upstart is losing money for the first time in a while but I believe UPST stock is oversold. Now is a great time to buy UPST stock just above its $20 IPO price.

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