UPST Lost 17% In A Month. Do You Buy Or Wait?
Upstart (UPST) stock is down 16.7% in 21 trading days. While history suggests price dips recover, there is risk – specific to profitability. Consider the following data:
- Size: A $6.6 Bil company with $844 Mil in revenue currently trading at $68.85.
- Fundamentals: Last 12 month revenue growth of 60.8% and operating margin of 0.0%.
- Liquidity: Has Debt to Equity ratio of 0.2 and Cash to Assets ratio of 0.2
- Valuation: Currently trading at P/E multiple of -1035.3 and P/EBIT multiple of 0.0
- Has returned (median) 27.7% within a year following sharp dips since 2010. See UPST Dip Buy Analysis.
While we like to buy dips if the fundamentals check out – for UPST, see Buy or Sell UPST Stock – we are wary of falling knives. Specifically, it is worth trying to answer if things get really bad, and UPST drops another 20-30% to $48.19 levels, will we be able to hold on to the stock? What is the worst case scenario? We call it downturn resilience.
Below is a deep dive into Upstart (UPST) downturn resilience – specifically, its performance vs the market during past crises? Turns out, the stock saw an impact slightly better than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.
Below are the details, but before that, as a quick background: UPST provides a cloud-based AI lending platform that aggregates consumer loan demand and connects it with a network of AI-enabled bank partners in the United States.
2022 Inflation Shock
- UPST stock fell 96.9% from a high of $390.00 on 15 October 2021 to $12.10 on 2 May 2023 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- The stock is yet to recover to its pre-Crisis high
- The highest the stock has reached since then is $88.77 on 12 February 2025 , and currently trades at $68.85
| UPST | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -96.9% | -25.4% |
| Time to Full Recovery | Not Fully Recovered days | 464 days |
2020 Covid Pandemic
- UPST stock fell 18.8% from a high of $47.84 on 22 December 2020 to $38.87 on 30 December 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 5 January 2021
| UPST | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -18.8% | -33.9% |
| Time to Full Recovery | 6 days | 148 days |
Worried that UPST could fall much more? You could take a look at the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.