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Should You Buy Upstart (UPST) Stock Right Now?

By Selena Maranjian | October 06, 2025, 8:27 AM

Key Points

  • Upstart is essentially an upstart in the credit bureau world.

  • Its artificial intelligence software helps facilitate loans, benefiting both lenders and borrowers.

  • Its stock isn't exactly cheap, but it doesn't seem wildly overvalued, either.

Do you know about Upstart (NASDAQ: UPST)? It's a fintech (financial technology) company making good use of artificial intelligence (AI) in the lending arena. It's essentially a new kind of credit bureau, and it describes itself as "the leading AI lending marketplace, connecting millions of consumers to more than 100 banks and credit unions ... With Upstart AI, lenders can approve more borrowers at lower rates. ... More than 90% of loans are fully automated, with no human intervention by Upstart." See? Upstart is intriguing!

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How's Upstart been doing? Well, in its second quarter, it originated 372,599 loans, up 159% year over year, and took in $257 million in revenue, about twice the year-earlier level. Its algorithm seems quite effective, allowing for 43% more loan approvals, often at lower interest rates. This is a win-win scenario for lenders, who want to lend, and for borrowers, who want lower interest rates. The company is also expanding into other promising realms, such as auto loans.

CEO Dave Giruoard noted in August that "A year ago, you saw the first signs that Upstart was returning to growth mode -- and today you can see it in full bloom. ... In addition to achieving triple-digit revenue growth, we reached GAAP profitability a quarter sooner than expected and our newer businesses actually accelerated off their amazing growth in the first quarter."

So, should you invest in Upstart stock right now? Well, its recent forward-looking price-to-earnings (P/E) ratio of 27 is well below its forward P/E of 77 in 2023 and 64 in 2024, suggesting that shares may be reasonably valued. Its price-to-sales ratio, though, recently 6.1, is above the five-year average of 4.4, suggesting a degree of overvaluation.

So, shares are not dirt cheap, but if you dig into Upstart and like what you see, you might buy now, aiming to hold for many years, or you might buy incrementally over time -- or perhaps just add it to your watch list.

Should you invest $1,000 in Upstart right now?

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Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Upstart. The Motley Fool has a disclosure policy.

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