Are Upstart's Credit Underwriting Models Still Outperforming?
After Upstart Holdings (NASDAQ: UPST) reported disappointing earnings results for the first quarter of 2022 and lowered full-year guidance, shares of the artificial intelligence (AI) lender have plummeted close to 70% over the last five days.
There were a number of things in the quarter that concerned investors, including funding issues from the capital markets and lower expected transaction volume and conversion rates. But at the core of Upstart's business model is its ability to better assess and underwrite credit. That's the company's value proposition to banks, credit unions, and institutional investors.
If the company can deliver on this, it could still deliver good returns in the long run, so let's look at whether Upstart's credit underwriting algorithms are still outperforming traditional underwriting methods.
Source Fool.com
