Upstart Holdings, Inc. (UPST): A Bull Case Theory

We came across a bullish thesis on Upstart Holdings, Inc. (UPST) on Deep Value Retirns’ Substack. In this article, we will summarize the bulls’ thesis on UPST. Upstart Holdings, Inc. (UPST)’s share was trading at $47.17 as of 30th May. UPST’s forward P/E was 28.90 according to Yahoo Finance.

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A data centre room with cloud technology, illustrating the enterprise application software services.

Upstart (UPST) offers compelling upside potential if it can successfully navigate its current challenges and deliver on its growth ambitions. While the company is not yet producing clean free cash flow, management’s target to achieve GAAP profitability by the second half of 2025 marks a significant step toward financial sustainability.

Upstart’s innovative platform and market position give it strong growth prospects, and if it can convert this growth into consistent free cash flow—targeting at least $25 million quarterly—it would validate the long-term investment thesis.

Addressing the $700 million net debt and potential equity raise will be critical, but successful deleveraging would strengthen the balance sheet and reduce investor concerns. Achieving these milestones could lead to a substantial re-rating of the stock, with the current $100 per share price target representing a conservative estimate of its upside by mid-2026.

For investors who believe in Upstart’s technology and market opportunity, the company’s path to profitability and improved cash flow generation offers an attractive risk/reward profile, positioning it well to capitalize on its growth potential and reward patient shareholders as it scales sustainably.

Previously, we have covered Upstart Holdings, Inc. (UPST) in March 2025 wherein we summarized a bullish thesis by Unconventional Value on Substack. The author highlighted the company’s AI-powered lending platform’s improved risk models and strong 2024 growth, positioning the company for a recovery and continued expansion if economic conditions improve.

Upstart Holdings, Inc. (UPST) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 33 hedge fund portfolios held UPST at the end of the first quarter which was 39 in the previous quarter. While we acknowledge the potential of UPST as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.