Upstart Holdings Inc ($UPST) is an AI-lending company that recently IPO'd in December of 2020 and is revolutioning the traditional "FICO score" credit system using artificaial intelligence to allow more people to obtain loans.

While traditional banks commonly use 8-15 variables to assess credit risk for personal loans, Upstart uses more than 1600 variables and the power of AI to much more accurately assess credit risk. The result; based on an internal study comparing the Upstart model to that of several large U.S. banks, is a 172% increase of issued loans but at the same default rates.

Upstart generates revenues by selling the use of its platform to banks which, can then more accurately assess risk, and ultimately give out more loans that won't default, and make more money from the interest payments. In addition, based on last quarter, 71% of Upstart loans were fully automated, creating a leaner operation for whoever it is issuing the loan through the Upstart platform.

Upstart's management increased 2021 guidance from $500 million to $600 million between Q4 2020 and Q1 2021 earnings announcements

2020 Revenues: $ 233.4 million (42% YoY increase)

2021 Revenues Est.: $ 600 million (157% YoY increase)

Not only is Upstart one of the few new firms in the fintech space that is profitable but it is also generating positive free cash flows.

Based on an enterprise value of $9.4 billion according to Yahoo Finance, it is trading at 15.7x estimated 2021 revenues which, in comparison is quite low for a company in this sector with such high revenue growth. For example, Affirm ($AFRM) which, is a comparable company that is not yet profitable trades at an EV/Revenue multiple of 23.3x.

Hence, even after this rally towards $134/share i think Upstart ($UPST) is trading at low multiples and has ways left to go and could easily reach $180/share by next year.

Lastly, they have yet to tap into their total addressable market which, amounts to $92 billion for personal loans. Additionally they have yet to fully immerse themselves in the auto loan space which, they have begun to address through the acquisition of Prodigy Software, a provider of cloud-based automotive retail software.

Management: Mostly Ex-Google (CEO was a VP at Google Enterprise)