Upstart Investors Are Learning a Lesson LendingClub Investors Learned Years Ago

Once a high-flying fintech platform, Upstart (NASDAQ: UPST) has crashed and burned recently. The stock is now down more than 90% since its highs last summer, despite a recent earnings report that just showed triple-digit revenue growth. In fact, unlike a lot of other high-growth tech stocks, Upstart even posted positive GAAP net profits.  

So what the heck is going on here? It's an unfortunate lesson LendingClub (NYSE: LC) investors learned five years ago.

Such a drastic rerating from the market usually comes from either severe business under-performance, or investors looking at a company in a new way -- or perhaps a combination of both. On last week's earnings release, Upstart management's forward guidance, discussion of its credit model performance, and the company's having to use more of its balance sheet to hold loans seems to have crystallized this rerating.

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Source Fool.com