Artificial intelligence (AI) enabled lending platform Upstart (NASDAQ: UPST) recently announced a partnership with Alliant Credit, a leading credit union, to offer AI-powered loans to its members across the country.
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Upstart Will Provide Loans to Qualified Members of the Union
With Alliant Credit now a member of the Upstart Referral Network, the lending process should be more smooth now. Qualified loan applicants who fulfill Alliant’s field of membership requirements and credit policies will receive customized loan offers.
Notably, Alliant Credit management believes that Upstart is the right partner for its loan disbursement activities. This is primarily because of Upstart’s robust systems and processes which ensure borrowers are heavily scrutinized and then provided loans. Further, the partnership will allow Alliant Credit to increase its members too.
Dwindling Hedge Funds Confidence
Despite the partnership announcement, hedge funds remain concerned about the company’s operations and have been heavily shorting the stock in recent times.
TipRanks’ Hedge Fund Trading Activity tool shows that hedge fund confidence in UPST is currently Very Negative. Moreover, the cumulative change in holdings across the five hedge funds that were active in the last quarter was a decrease of 855,000 shares.
Is Upstart a Good Stock to Buy Right Now?
The Wall Street community is not upbeat about Upstart. This muted sentiment can be attributed to the company’s recent second-quarter results. The results were marked by both revenue and earnings failing to top the Street estimates. Moreover, earnings witnessed a massive decline of 98.4% from the prior year.
Overall, the consensus among analysts for Upstart stock is a Moderate Sell based on one Buy, five Holds, and six Sells. The average UPST stock prediction of $26.64 implies a downside potential of 19.3% from current levels. Shares have declined 84.5% over the past year.
Final Thoughts
Upstart’s partnership with a top-10 credit union in the country like Alliant Credit is a positive for the company. The deal could lead to operational tailwinds in the form of increased lending activity. However, the company’s massive decline in profitability and forecast of a loss in the third quarter remain concerns.
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