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Upstart (NASDAQ:UPST) just dropped a game-changing update to its Auto Retail platform, and it's already shaking up the dealership floor. With these new features, dealerships can cut the deal time in half, sell more cars, and secure higher margins. The upgrades include faster deal processing, an AI-powered financing module, and a revamped credit dashboard that shows initial FICO Auto Scores on soft pulls. In plain English: dealerships now have a smarter, faster way to close deals and get customers approved for financing without the usual headaches. Dealers using these tools report selling up to five more cars per salesperson each month.
Investors are starting to see a comeback story. After a brutal stretch where rising interest rates hammered Upstart's stocksending it 85% off its highsthe company's shares shot up 51% in 2024, as market optimism returned. This morning it's up over 10%. Upstart's secret sauce is its AI lending model, which helps banks approve more loans without increasing defaults. Sure, higher interest rates put pressure on loan volume and revenue, but the model itself has held strong. Add in a $3 trillion market opportunity, and you've got a company that's primed for big things, even if it's still mainly working with smaller credit unions.
Here's the bottom line: Upstart is making moves to capitalize on its long-term potential, and 2025 could be the year it starts to hit its stride. That said, the stock isn't cheapit's trading at 9 times trailing-12-month salesso it's not for the faint of heart. If you're comfortable riding the wave of a high-risk, high-reward disruptor, Upstart is worth keeping on your radar. Just don't bet the farm on itthis is a stock for those who thrive on a little volatility.
This article first appeared on GuruFocus.