Upstart Holdings, Inc. (UPST): A Bull Case Theory

We came across a bullish thesis on Upstart Holdings, Inc. on Make Money, Make Time’s Substack by Oliver | MMMT Wealth. In this article, we will summarize the bulls’ thesis on UPST. Upstart Holdings, Inc.'s share was trading at $37.92 as of February 4th. UPST’s trailing and forward P/E were 148.38 and 16.08 respectively according to Yahoo Finance.

Upstart (UPST) is positioned as a disruptive force in consumer credit by replacing traditional, backward-looking FICO-based underwriting with a large-scale machine learning model that evaluates non-traditional variables to better assess borrower risk.

This approach allows Upstart to approve roughly 44% more borrowers than legacy credit models, effectively monetizing applicants that banks often misclassify as high risk despite being fundamentally safer. The total addressable market is enormous, exceeding $3 trillion, driven by a $2.3 trillion mortgage opportunity, approximately $700 billion in auto loans, and around $100 billion in personal loans, underscoring the long runway if adoption continues.

A key near-term catalyst—and risk—is the political backdrop. Donald Trump’s proposal to cap credit card interest rates at 10% could be structurally bullish for Upstart if banks retreat from all but the lowest-risk borrowers, creating a large pool of rejected applicants that Upstart’s model is designed to serve. However, if such caps were extended broadly across consumer credit, including personal loans, the economics of Upstart’s model could be materially impaired, making regulatory interpretation a critical swing factor.

From a financial standpoint, expectations remain compelling. Consensus forecasts point to 23% revenue growth and 43% EBITDA growth in 2026, with EBITDA margins around 26%. Despite this, the stock trades at roughly 5x forward revenue, well below the 10x+ multiples seen historically when the business was less mature.

On EBITDA, a ~20x NTM multiple appears undemanding given the growth profile. Looking further out, a path to $2.5 billion in revenue by FY29 at a 30% EBITDA margin implies roughly $750 million in EBITDA. Applying a conservative 20x multiple yields a $15 billion enterprise value, suggesting potential upside of roughly 2.5x from current levels, offering an asymmetric risk/reward despite near-term uncertainty.

Previously, we covered a bullish thesis on Upstart Holdings, Inc. (UPST) by Unconventional Value in March 2025, which highlighted the company’s AI-driven underwriting advantage, improving risk models, and positioning for the next credit cycle. UPST’s stock price has depreciated by approximately 31.65% since our coverage. Oliver | MMMT Wealth shares a similar view but emphasizes regulatory catalysts, TAM expansion, and EBITDA-led valuation upside.

Upstart Holdings, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 37 hedge fund portfolios held UPST at the end of the third quarter which was 34 in the previous quarter. While we acknowledge the risk and potential of UPST as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than UPST and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.