Any insights for the following?: Upstart Holdings Inc. (UPST) & Global-E Online Ltd. (GLBE).

0
0

Hello, I am trying to follow up on a few recommendations I received from a friend; he is a bit more of a ‘risk-on’ investor, so I thought I would first check-in with stocktrades first. A brief analysis would be sufficient, perhaps discussing intrinsic/historical value, future prospects, etc. or anything else noteworthy. Thank you!

Marked as spam
Asked on February 1, 2023 12:51 pm
1 views
0
Private answer

It is relatively hard to calculate intrinsic values on both these companies as cash flows are relatively volatile. The more volatile they are, the more "guessing" you're doing from a DCF standpoint and to be honest the effort put into it is likely not going to be worth the results you get. On the other hand, performing DCF on a company with consistent and predictable cash flows can give you a pretty good estimate on the future price.

Upstarts trajectory right now slightly worries me. Revenue is on the decline and estimates for revenue next year get even worse as the company is supposed to post yet another double digit drop in the top line. High debt levels, weak profitability and still actually pretty expensive in my eyes. With the company relying on lending as well, if we were to go into a recession or rates were to be maintained at high levels for a year, this stock will undoubtedly be under continued pressure. Very hard pass from me at this point. I'd be potentially revisiting when the situation improves for them. Sure, you could potentially miss the bottom, but you can also avoid the company going much lower, which is possible.

Global E is one that I could potentially have time for though. Its business structure should allow it to survive in any economic climate. However, it is really hard to opt for this one over Amazon, primarily because of the economic moat and valuation Amazon presents at this time. But if your risk tolerance is a bit higher, I don't mind this company.

Marked as spam
Posted by Dan Kent
Answered on February 3, 2023 9:13 am