Investors shouldn't doubt that Upstart (UPST 0.94%) is an innovative company. It has introduced what it believes is an upgrade to the traditional loan credit-rating system. The business leverages its machine learning and artificial intelligence (AI) capabilities to expand credit access to more borrowers. Since 2014, it has facilitated $57 billion in loan originations.
This platform model, though, hasn't translated into a winning outcome for investors. This fintech stock currently trades 92% below its late-2021 high. Maybe there are better days ahead.
Does Upstart have what it takes to double its current share price in five years?
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The business is hitting its stride again
During the first quarter of 2026 (ended March 31), Upstart posted strong year-over-year revenue growth of 44%. This top-line gain was driven by a 77% jump in loan volumes. The platform is clearly seeing robust demand for loans, of which 91% were completely automated from start to finish.
Upstart reported adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $40.5 million in Q1, good for a 13% margin. Management expects this margin to rise to 21% for the full year. Maybe this can lead to positive, generally accepted accounting principles (GAAP) earnings for Upstart, though expenses rose faster than revenue during the quarter.
This is welcome news for investors who might still have bad memories about the company's poor performance not that long ago. In 2023, amid rising interest rates, Upstart's revenue tanked 39% year over year. And it registered a worrying $257 million operating loss that year. The business appears to be hitting its stride again.
NASDAQ: UPST
Key Data Points
Shares may rise 100% by 2031
Between 2025 and 2028, consensus estimates from sell-side analysts call for Upstart's revenue to grow at an annualized pace of 30.8%. This is an extremely encouraging outlook. Given the company's ability to quickly expand, as it demonstrated last quarter, this sales prediction doesn't look crazy.
So, this fintech stock may double over the next five years, particularly if revenue gains translate into a sizable earnings stream. Upstart operates in massive lending verticals that are collectively measured in the trillions of dollars in annual origination volume. The market size is large enough for durable growth.
And the valuation, currently at a price-to-sales ratio below 2.7, isn't demanding. There's upside simply because shares trade 92% off their peak. Improving market sentiment can boost the stock price.
But the issue is that Upstart has proven to be very cyclical. Its success depends on a favorable macro backdrop, which isn't always the case. And it hasn't demonstrated that it can report growth and profits in adverse scenarios.
The stock could double by 2031. The probability I'd assign to this outcome, though, is low.
