Symbols

Upstart or So-fi

4/17/2025 06:51am

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The deep research logic is organized as follows: 

Okay, the user is asking whether to invest in Upstart (UPST) or SoFi (SOFI). Let me start by recalling the data from the references provided. 

First, looking at the financial metrics from Reference 1, both companies have different net income and revenue figures. Upstart had a net loss of $2.76 million with revenue of $218.96 million in Q4 2024, while SoFi reported a net income of $332.47 million and revenue of $734.13 million. That's a big difference in profitability. 

Next, the valuation ratios from Reference 3 show that Upstart has a negative P/E ratio (-29.91), which makes sense since it's not profitable yet. Its P/S ratio is 6.04, which is higher than SoFi's 4.52. SoFi's P/B ratio is 1.8, indicating it's more undervalued compared to Upstart's 5.92. 

Looking at the recent news, Upstart's stock dropped 18.77% due to tariffs (Reference 4), but they have upcoming earnings on May 6, 2025, with expected revenue growth (Reference 5). SoFi, on the other hand, secured a $5 billion loan deal (Reference 9), which boosted their stock by 12%. They also have a diversified revenue model with financial services and technology platforms contributing significantly (Reference 19, 20). 

Upstart's financial health is a concern with a negative ROE (-20.27%) and high debt-to-equity ratio (2.35%) (Reference 2). Insider selling (Reference 13) and recent price volatility (References 4, 7, 8) add to the risk. However, their AI-driven lending platform and expansion into new loan types (Reference 16) could be growth drivers. 

SoFi's diversification into banking, investments, and technology (References 19, 20, 21) reduces reliance on lending. Their GF Value suggests they're "Modestly Overvalued" (Reference 4), but the $5 billion deal and partnerships (Reference 9, 12) show strategic strength. 

Considering the user's profile, they prefer tech and entertainment sectors with a higher risk tolerance. Upstart's AI focus might appeal, but the financial risks are significant. SoFi's stability and diversification could be safer, especially with their recent deals. 

In conclusion, Upstart is a high-risk, high-reward play with potential in AI lending, while SoFi offers stability and growth through diversification. The user's preference for penny stocks and high volume might lean towards Upstart, but SoFi's fundamentals are stronger.

Upstart (UPST) vs. SoFi (SOFI): A High-Risk vs. High-Reward Tech-Fintech Comparison
Upstart and SoFi represent contrasting approaches to fintech innovation, with Upstart focusing on AI-driven lending and SoFi building a diversified financial ecosystem. Below is a detailed analysis to guide your decision:

1. Financial Performance & Valuation

Upstart (UPST):
- Q4 2024 Results: Net loss of $2.76M (vs. $332.47M profit for SOFI), revenue of $218.96M ¹.
- Valuation: Negative P/E (-29.91), high P/S (6.04), and P/B (5.92) ².
- Risks: High debt-to-equity (2.35%) ³, insider selling ⁴, and negative ROE (-20.27%) ³.

1/3

UPST, SOFI Net Income

SoFi (SOFI):
- Q4 2024 Results: Net income of $332.47M, revenue of $734.13M ¹.
- Valuation: P/E of 25.21, P/S of 4.52, and P/B of 1.8 ².
- Strengths: Diversified revenue (47% from non-lending segments) ⁵, $5B loan deal with Blue Owl Capital ⁶, and GF Value of $10.56 (slightly overvalued) ⁶.

UPST, SOFI P/E(TTM), P/S...

2. Growth Catalysts & Risks

Upstart:
- AI-Driven Lending: Automates 91% of loans, expanding into auto loans (+60% YoY) and HELOCs ⁷.
- Upcoming Earnings: Q1 2025 revenue expected to grow 57% YoY to $200.74M ⁸.
- Risks: Tariff-related volatility ⁹, 37.16% YTD decline ⁹, and no positive EPS ².

UPST, SOFI Debt-to-Equity Ratio, ROE(Average)

SoFi:
- Diversification: 47% of revenue from financial services (e.g., Galileo platform, banking) ⁵.
- Strategic Deals: $5B loan platform agreement ⁶, partnerships with Mesh Payments and Templum ¹⁰.
- Risks: 34% YTD decline ¹¹, insider selling ⁴, and GF Value of $8.93 (significantly overvalued) ¹².

3. Market Sentiment & Analyst Outlook

Upstart:
- Price Target: $73.79 (71% upside from $43.14) ¹³.
- Consensus: Neutral (average rating 2.7) ¹⁴.
- Catalysts: AI adoption, HELOC growth, and debt reduction ⁷.
SoFi:
- Price Target: $12.98 (21% upside from $10.71) ⁶.
- Consensus: Neutral (average rating 2.9) ¹⁵.
- Catalysts: Mortgage origination ($23.2B in 2024) ⁵, deposit sweep product ¹¹.

4. Strategic Fit for Your Portfolio

Choose Upstart if:
- You tolerate high volatility for AI-driven disruption.
- Belief in Upstart’s automation (91% loans automated) and HELOC growth ⁷.
Choose SoFi if:
- You prefer stability in fintech with diversified revenue streams.
- SoFi’s $5B loan deal and 47% non-lending revenue ⁵ align with your risk tolerance.

Conclusion

Upstart is a high-risk, high-reward bet on AI lending, while SoFi offers moderate growth with diversification. Given your preference for high-risk tech stocks (e.g., penny stocks, AI), Upstart aligns better with your profile. However, SoFi’s strategic deals and financial stability make it a safer alternative.

Source:

1. UPST, SOFI Net Income, Revenue, Diluted EPS