This AI Stock Just Grew Its Revenue 264%
Upstart (NASDAQ: UPST) has seen major acceleration in its growth over the last year and it could see even greater growth if it finds success in auto loans. In this clip from "3 Minute Stocks Updates" on Motley Fool Live, recorded on March 30, Motley Fool contributors Toby Bordelon and Rachel Warren discuss the recent earnings for the company and where the growth opportunities lie ahead for the AI lending platform.
Toby Bordelon: Quick refresher here in what they do. They're an AI lending platform. They connect consumers to partner banks. They don't actually lend themselves, what they do is provide the AI-based algorithm and technology to analyze the loans, help the banks make better lending decisions. You can see what's going on with that here. They think this model is good for both consumers and for banks. Because consumers get higher approval rates, a lot of these loans are instantly approved. There's no waiting. You make your application and you're good to go. It's also more inclusive. It allows for access to credit for a lot of demographics, something that is a big concern right now. For banks, this is a highly automated experience. It makes it more efficient for them. It saves them money in the lending process. Let's look at what they did. Here are some key results from the last fiscal year that they just reported. I'm looking at these numbers and, wow, look at those growth rates. Just to look at that revenue versus the year before. We're talking revenue up 264%, income from operations up almost 1100%, which is just astonishing if you think about it. The difference between that revenue and the increase in income from operations to show you how good they are at keeping their costs down as they grow. A lot to look at what's going on or what's been happening over this past year. Here are some key operating metrics. You see that general trending up in time in terms of transaction volume, the number of loans on the left there, that transaction volume in dollars on the right there. Very nice. It's accelerating. You see some acceleration in their growth. Over time, you can see the light green is the revenue. The yellow is their net income, and you just see that growing over time. Really good to see there. They see more opportunity as they roll out auto loans ahead. They're looking at that $1.5 billion or so over for fiscal 2022. This is a new thing for them, a new growth opportunity. I love this. Some concerns over their algorithm. We've seen in the past year people with some skepticism; does this really work? I think their revenue growth, we've seen over the years, suggest that there's something here. If they can make it work with auto loans, there's a lot to like in the years to come.
Source Fool.com
