Can Upstart Build Value Amidst Choppy Markets?

In this video clip from “The Future of Fintech” on Motley Fool Live, recorded on June contributor Lou Whiteman discusses how Upstart‘s (UPST -19.71%) business may be slowing during the current economic downturn, but its incremental growth may be better for the company in the long run.

Lou Whiteman: There’s another angle to this bull case and I think it fits in exactly what we’re saying and that’s just the bull case it is incrementalism, and as much as we love sexy growth and massive growth, at some point, it may just be that The bull case or the best outcome is that yes, this is a challenge. Yes, things are going to slow, but it’s also part of a business growing up, and it’s actually if you look at the day-to-day and avoid just the fear, things are going well.

I want to share just three press releases from this month that I think make the bull case better than anything you and I can say, and they’re real simple. You don’t have to read too closely. But this is a new bank partner on June 2, here if it follows another new bank partner on June 28, this one, I think the best of all just this morning, a partner since Oct. 21, 2021, expanding the relationship.

At the end of the day, while we want to see all of these, wow, and we have to watch default rates as a negative, the people doing business with them, the assessing the business of them, and Matt, there is your Ferrari , I can see it right there, but the people that are working on that, for them to grow their business right now, I like that. At the end of the day, I can’t go in and read their algo, I can’t figure out in real-time whether or not it’s working or all going to pieces.

But their partners are still signing on and an existing partner is increasing its relationship, building on that relationship, that is an incremental good sign, and as a long-term holder, I would be very happy if the last chapter of the story is yes , growth slowed, things got choppy, default rates went up a little, but they worked through it, they kept building the business, and now it’s a massive company 20 years later.

That’s not the coolest story, the sexiest story, but that is a great outcome, and there is at least the suggestion, along with the suggestion of gloom and doom that Morgan Stanley (MS -0.34%) highlighted, there is data to suggest that as well, so I’m certainly not giving up.

Lou Whiteman has positions in Upstart Holdings, Inc. The Motley Fool has positions in and recommends Upstart Holdings, Inc. The Motley Fool has a disclosure policy.

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