Deep Dive: Kris (From Growth to Value) Discuses Upstart Stock
As always, it was a pleasure to have Kris (aka From Growth to Value) on the show. You can check out more of his work over at Seeking Alpha or by searching "Potential Multibaggers". On this show we discussed Upstart with Kris. Here are some questions we asked him:
What attracted you to Upstart?
Can you explain Upstart’s business model? How do they fit within the loan underwriting process?
Upstart’s advantage is its AI-driven underwriting model. How hard do you think it would be for someone to compete with them?
How important is the quality of loans being originated? How are investors able to track that?
For the first 9 months of this year, 44% of Upstart’s loan originations came from Credit Karma. Do you see this customer concentration as a big risk?
Thoughts on management
Are they more comfortable taking on credit risk?
The Prodigy acquisition seems to be going great so far. Can you explain what that is and what opportunity it presents for Upstart?
The largest opportunity they outline by far is mortgage originations. What indicators/moves have they made into that business?
Upstart is in some ways trying to dethrone FICO, but already has approximately twice its market cap. How can Upstart fulfill these high expectations over the next decade?
Biggest risks to the business
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Disclosure: The author and podcast guests are not your financial advisors. Ryan Henderson and Brett Schafer are general partners and portfolio managers at Arch Capital. Clients of Arch Capital may hold securities discussed on this show.