UPST
This is a long term investment and not a trade, I am looking to hold this company stock the long term (more than 3 years). And before presenting my fundamental analysis, A good price entry point is my concern, All analysis discussed in order below:
Fundamental analysis:
Founders background check:
- Founder's objective and CEO management is the most important thing for the success of a company. Screening through upstart company we can find out that founders are three:
- Dave Girouard: From his Linkedin page, his most notable previous experience is working at:
1- Apple as product manager for 2.5 years (From Apple website we can see that the Product Manager job description is to deliver process and analytic systems AND drive decision automation using machine learning and conceptualize, build, and deliver automated decision analytics. Even though we do not have his superiors review his work in Apple, we can assume being a Manager at Apple means he know the work he is doing, secondly his work experience in Apple is relevant to his business which all rotate around machine learning, artificial intelligence and data analytics.
2- Google as Enterprise President for 8 years creating cloud apps business, at this level of experience in the same field of clouds and analytics and AIs MLs, its clear we can find article around him in search engines and about his previous projects and works. This guy background is a sold one.
- Anna Counselman: from her Linkedin page we can find out she worked with Dave Girouard in Google and they left Google at the same year and founded Upstart, his specialty is customer relations, services, operations and sales. It is a good combination but we need to see whether this company is build on opportunity they find in the market or they are two people falling in love with each other and decided to make their own wealth. This is not an issue as each one seem to have a different stable life and marriage, clear.
- Paul Gu: we don't have much information about him except he graduated from Yale University and worked in multiple companies.
All three co-founders are highly invested, but Girouard has a massive financial interest in the company, with 17.5% of the outstanding shares.
We can also find big names under the company's management team. This is a very positive sign.
Business model:
- Before looking at the stock of the company, we have to realize that this stock is actually based on a company behind it, and if this company is useless, on the long term the stock of it will be doomed. The company use AI based proprietary model to analyse credits instead of the traditional way of credit analysis (FICO score and income verification) which use limited number of variables, instead Upstart use more variables. Upstart helps customers get loans in two main ways: It does the marketing on its own to find customers and then pass them off to banks and credit unions, or banks can essentially embed Upstart's technology within their websites and branding. In term of growth, if we look at the company's revenue, it is not slowing down and if they expanded their model from personal loan lending AI model to Mortgages market, the boom will be on another whole level. In the long term, this have to be a great business model as long as their AI model is different and can't be replicated. AI technology develop better the more data it analyse, because Upstart is one of the first companies in this field and partnering with automotive lending retailers (Step one automotive group, Heritage Volkswagen, Cadillac of Greenwich, Germain automotive partnership includes ford hondai mazda lexus toyota VW and much more), if we look for banks that upstart partnering with are (First National Bank of Omaha, first federal bank of Kansas city and customers bank).
Price wise:
- UPST shown a very upside possibility and now the down turn happened due to correcting from the speculative up price movement as well as due to the market enters RISK OFF period which will show strength with the USD while the market lose new participations.