All of fintech have been unfairly punished since September despite the markets recovering to near all time highs. In particular, Upstart ($UPST) and Pagaya ($PGY) are fundamentally undervalued and are prime short squeeze candidates.
Fundamentals:
– Both businesses are stronger than they were last year, when the stock prices were 3-4x higher.
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P/S is under 3 for $UPST and under 1 for $PGY, when the average fintech is 5-7x. Also, the big banks and Black Rock currently have a revenue multiple of 4 – 6x despite lower growth…
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Related to the above, bank stocks are close to all time highs again, whereas Fintech stocks have sold off 50-80% since September due to the headline fear narrative surrounding private credit, which is specific to corporate tech loans and NOT to consumer loans. Several bank CEOs from this week's earnings calls even said that they are not concerned about private credit and their business performance tells the opposite of those headlines.
Short Squeeze:
– Both stocks are low float and have 30-35% short interest. Because of the low float, prices are volatile and easy to manipulate. A squeeze can easily send $UPST to $80, which happened before, and $PGY back to $40.
TLDR; rare opportunity where these stocks are fundamentally undervalued and have the low float/high short interest setup to trigger a squeeze.
Fintech sector still unfairly punished despite broader market back to near all time highs
byu/Biased_Media instocks
Posted by Biased_Media
6 Comments
I personally hope SOFI burns. I needed $30k bridge loan, made $400k last year, 812 credit score and they denied my application because I “closed too many accounts”, then suggested I reapply next month.
This dude is over here shilling his bags.
Weird. I’m surprised upstart is still in business with the shady shit thry were doing. Pretty sure there was at least one investor action going against them, if not one from lenders as well. Perhaps the SEC and other regulators will teabag them with the brass balls of justice, eventually.
Bruh bruh bruh, not fair, lmao.
Financial sector will continue to be scrunitized while private credit risks loom. We did not have concern for such a massive debt during last year’s fintech bull market.
Pgy is great