4. Upstart Holdings, Inc. (NASDAQ:UPST)
Third Point’s Stake Value: $605,200,000
Percentage of Third Point’s 13F Portfolio: 4.22%
Number of Hedge Fund Holders: 20
Upstart Holdings, Inc. (NASDAQ:UPST) is a California-based company that runs a cloud lending platform, powered via artificial intelligence. Dan Loeb’s Third Point held 4 million Upstart Holdings, Inc. (NASDAQ:UPST) shares in the December quarter, worth $605.2 million, representing 4.22% of the total 13F securities.
Upstart Holdings, Inc. (NASDAQ:UPST)’s Q4 earnings came in on February 15. The company posted an EPS of $0.89, beating analysts’ consensus estimates by $0.38. Revenue for the period jumped 251.57% from the prior-year quarter to $304.85 million, surpassing market predictions by $42 million.
FBN Securities analyst Shebly Seyrafi initiated coverage of Upstart Holdings, Inc. (NASDAQ:UPST) on April 12 with an Outperform rating and a $150 price target. While Upstart Holdings, Inc. (NASDAQ:UPST) revenues are mainly generated by the personal loan market, the company entered the auto loan market in 2020 and the analyst projects the sector to account for 3% of fee revenue in 2022 and 6% in 2023. Upstart Holdings, Inc. (NASDAQ:UPST) can also expand into the smaller dollar loan market, installment loans to business owners, and the home mortgage market, noted the analyst, who expects “very strong growth in year two of entry into each of these markets”.
According to Insider Monkey’s Q4 data, Upstart Holdings, Inc. (NASDAQ:UPST) was found in the public 13F portfolios of 20 hedge funds, compared to 23 funds in the third quarter. D E Shaw is a significant stakeholder of the company, owning 1.7 million shares worth approximately $261 million.
Here is what Vulcan Value Partners Large Cap Fund has to say about Upstart Holdings, Inc. (NASDAQ:UPST) in its Q4 2021 investor letter:
“Upstart Holdings Inc. was another material detractor during the quarter. Upstart is an artificial intelligence (AI) and cloud-based lending platform. Upstart uses over 1600 variables in its AI models. Its lending platform delivers lower default rates, higher approval rates, lower rates for consumers, and higher returns on investment for its bank and institutional clients. As former owners of FICO, we believe Upstart has the potential to be the FICO of the 21st century. Recent stock price volatility has given us an opportunity to follow our investment discipline. During the third quarter of 2021, Upstart’s stock price increased significantly, and we materially reduced our position in the company. Following its most recent earnings release, our value increased but Upstart’s stock price began to decline significantly. With a significantly improved price to value ratio, we added to our position in Upstart. We simply took advantage of stock price volatility to manage risk in the portfolio and improve our returns and our prospective returns.”
