6 weeks ago $UPST reported Q4 numbers and shocked investors when they raised 2021 revenue guidance to $500+ million (probably conservative) due to an acceleration in their business and more bank partners. ir.upstart.com/static-files/4…
This chart shows how $UPST ripped 3x in a week:
$UPST has spent 8+ years building the most sophisticated AI-powered digital-first underwriting platform that allows bank partners to use their model to improve their lending.
Whereas the typical underwriting uses outdated FICO scores, $UPST uses 1600 variables & data points.
When you add up 700,000+ loans processed plus millions of payments... $UPST has 15+ billion cells of data which is one reason why their model is so much better. This is also a massive competitive advantage and almost impossible for others to replicate quickly.
$UPST allows their bank partners to customize the variables to fit their requirements such as...
$UPST's model leads to more approvals with lower rates for the borrowers while generating higher revenues with fewer defaults for the banks. It's a win/win.
$UPST is better, faster, cheaper and more accurate than traditional underwriting models based on FICO scores.
The credit markets that $UPST has the ability to enter (personal, auto, home, small business, etc) are in the trillions per year when you add them up.
I believe over the next few years hundreds of banks will realize the power of AI in underwriting and will turn to $UPST for help
"We don't compete with banks, we partner with them, helping them navigate one of the most fundamental technology transformations ever."
~Anna Counselman (co-founder of $UPST)
Here is my recent interview with the Founder & CEO @davegirouard
80% of Americans have never defaulted on a loan yet only 48% have a credit score that would give them access to prime credit rates.
Lending is the perfect use case for AI.
~@DaveGirouard
I'm also excited about $UPST's recent acquisition of Prodigy which helps them get into auto lending which is a $600+ billion opportunity.
The analysts are also bullish on $UPST
I look forward to sharing more on the Twitter Spaces event today.
I'll be joining around 2:30pm EST to talk about $UPST
$DMTK (my second biggest position) is up 16% pre-market on reports that Cigna has offered positive support for $DMTK's PLA/PLA+ genomics patches for early melanoma detection
Cigna is one of the largest insurance companies in the world with 180+ million customers in 30 countries
This news about CIGNA was most likely made possible with two recent events which I already highlighted:
Another thing to note is that UnitedHealth Group also uses OptumInsight for their data/studies so it's very possible we see $UNH provide support for $DMTK's PLA/PLA+ patches as well as their next two products: Luminate and Carcinome
Yesterday I spoke for 55 minutes on @TwitterSpaces hosted by @WOLF_Financial about the markets, my favorite stocks, short selling and a bunch of other stuff.
I have no idea why $DMTK is down 14% today -- makes no sense. There is no news.
Volume is not that heavy and short interest is up to 25% so the bears/shorts are clearly running the show.
$DMTK is still one of my highest conviction stocks for the next 3-5 years. Adoption with dermatologists will be slow, just like it is for most new technologies but eventually $DMTK will be the standard of care. Dermatologists will use the patch before they use the scalpel.
I still believe $DMTK has enormous upside over the next 5+ years.
Don't forget that PLA is just their first product, they have more genomics smart patches coming to market later this year and next year that should be 10x bigger than the PLA product for melanoma detection.
These are tough days for growth investors but also why it's important to keep some perspective.
If you're a long term investor don't let a few days/weeks derail you from your investment strategy.
You'll never achieve big returns if you can't handle some pullbacks along the way.
Whenever my growth stocks pullback I tend to get more concentrated in my favorite positions where I have the most conviction. This doesn't always pay off but it's what works for me.
It's important for every investor to figure out how you want to manage through volatility.
Generally speaking, I think most investors are better off not micromanaging their portfolio or timing the markets because none of us are smart enough to do it well on a consistent basis.