Here's Why I Won't Buy Upstart Stock
Artificial intelligence (AI)-powered lending-platform Upstart (NASDAQ: UPST) tells a good story. When a consumer wants to borrow money from a bank or credit union, the process of approving that loan can be time-consuming and complicated. A lender may require a wide variety of documentation, and phone calls or emails requesting clarification will slow things down further.
Upstart partners with lenders looking to reduce the time and costs associated with extending loans. Using its AI models, Upstart instantly approves around three-quarters of the loans it processes. For borrowers, quicker approvals are paired with lower interest rates that are justified by Upstart's models.
Upstart's revenue more than tripled in 2021, and the company generated impressive profit margins. The growth story was a hit with investors, and the stock soared throughout 2021 to peak just above $400 per share. The company was worth more than $30 billion at one point.
Source Fool.com
