Fundamental Short Selling Research

Eric Fernandez, CFA

TwoRiversAnalytics

Equity Bottom-Up

<ul>
<li>We normally write these “Workbench” reports in between our larger initiation pieces.  They are intended to offer a window into our short investment process and to highlight potentially interesting names.</li>
<li>This Workbench focuses exclusively on earnings quality shorts.  We continue to work on these names. Today we highlight:</li>
<li>Moderna (MRNA),  Knowles (KN)    Juniper Networks (JNPR)  Upstart Holdings (UPST)  Beauty Health Co (SKIN), Sonos (SONO). Kraft Heinz (KHC), AZEK Co. (AZEK), Energizer Holdings (ENR),  Fox Factory Holding  (FOXF)</li>
</ul>


We normally write these “Workbench” reports in between our larger initiation pieces.  They are intended to offer a window into our short investment process and to highlight potentially interesting names.
This Workbench focuses exclusively on earnings quality shorts.  We continue to work on these names. Today we highlight:
Moderna (MRNA),  Knowles (KN)    Juniper Networks (JNPR)  Upstart Holdings (UPST)  Beauty Health Co (SKIN), Sonos (SONO). Kraft Heinz (KHC), AZEK Co. (AZEK), Energizer Holdings (ENR),  Fox Factory Holding  (FOXF)


Short Ideas on Our Workbench:  Earnings Quality

<ul>
<li>This model finds companies facing recent sharp cuts in estimates. These shorts can have very disparate characteristics.</li>
<li>The key judgement involves whether the negative revisions are temporary or if they are indications of ongoing weakness in the business. </li>
<li>Breaking Estimates stocks often continue to decline after the cuts.  This week we flag:  Upstart, Cerence, Zillow, Trex</li>
</ul>


This model finds companies facing recent sharp cuts in estimates. These shorts can have very disparate characteristics.
The key judgement involves whether the negative revisions are temporary or if they are indications of ongoing weakness in the business. 
Breaking Estimates stocks often continue to decline after the cuts.  This week we flag:  Upstart, Cerence, Zillow, Trex


Breaking Estimate Short Candidates: Upstart, Cerence, Zillow, Trex

<ul>
<li>This model uncovers companies facing recent sharp cuts in estimates. These shorts can have very disparate characteristics.</li>
<li>The key judgement involves whether the negative revisions are temporary or if they are indications of ongoing weakness in the business. </li>
<li>Breaking Estimates stocks often continue to decline after the cuts.  This week we flag:  Nutanix, Upstart, Ubiquiti, Corsair Gaming</li>
</ul>


This model uncovers companies facing recent sharp cuts in estimates. These shorts can have very disparate characteristics.
The key judgement involves whether the negative revisions are temporary or if they are indications of ongoing weakness in the business. 
Breaking Estimates stocks often continue to decline after the cuts.  This week we flag:  Nutanix, Upstart, Ubiquiti, Corsair Gaming


Breaking Estimate Short Candidates: Nutanix, Upstart, Ubiquiti, Corsair Gaming

Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Algosun Global

<ul>
<li>We see limited upside potential for <a href="https://www.smartkarma.com/entities/upstart-holdings-inc" target="_blank" data-smartkarma-citation="entities:29727:1" rel="noopener">Upstart Holdings Inc (UPST US)</a>  shares after reporting a record 200%+ YoY revenue growth rate in CY’21.   </li>
<li>Our calculations suggest insiders sold ~$1.5 billion worth of Upstart shares since August 2020, including Third Point, CEO of Upstart Holdings, and management of the fintech company. </li>
<li>Rising interest rates and tightening of credit markets may negatively impact revenue, keeping in mind that <a href="https://www.smartkarma.com/entities/upstart-holdings-inc" target="_blank" data-smartkarma-citation="entities:29727:1" rel="noopener">Upstart Holdings Inc (UPST US)</a>  primarily facilitates unsecured personal loans on the platform.</li>
</ul>


We see limited upside potential for Upstart Holdings Inc (UPST US)  shares after reporting a record 200%+ YoY revenue growth rate in CY’21.   
Our calculations suggest insiders sold ~$1.5 billion worth of Upstart shares since August 2020, including Third Point, CEO of Upstart Holdings, and management of the fintech company. 
Rising interest rates and tightening of credit markets may negatively impact revenue, keeping in mind that Upstart Holdings Inc (UPST US)  primarily facilitates unsecured personal loans on the platform.


Upstart Holdings: Slowdown In Revenue Growth And Tightening Of Credit Markets

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/upstart-holdings-inc" target="_blank" data-smartkarma-citation="entities:29727:1" rel="noopener">Upstart Holdings Inc (UPST US)</a> is both a consumer Internet brand as well an online loan origination platform. </li>
<li>Upstart is a rare fintech that has established credibility by delivering high growth with profits and cash generation. The healthy 2022 outlook underscores the long-term potential. </li>
<li>While the ongoing market volatility is a near-term risk, the tech sell-off presents an opportunity to gain exposure to a good story at an attractive valuation. </li>
</ul>



Upstart Holdings Inc (UPST US) is both a consumer Internet brand as well an online loan origination platform. 
Upstart is a rare fintech that has established credibility by delivering high growth with profits and cash generation. The healthy 2022 outlook underscores the long-term potential. 
While the ongoing market volatility is a near-term risk, the tech sell-off presents an opportunity to gain exposure to a good story at an attractive valuation. 


Upstart Holdings: Fast-Growing, Profitable, Cash Generative with Share Buybacks

United States

Upstart Holdings, Inc. operates as a holding company. The Company, through its subsidiaries, provides cloud-based artificial intelligence (AI) lending platform to improve access of credit while reducing the risk and costs of lending for bank partners.

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Upstart Holdings (UPST US)

Short Ideas on Our Workbench: Earnings Quality

Our "Workbench" focuses exclusively on potential earnings quality shorts. We continue to work on these names. Today we highlight ten names of...

Eric Fernandez, CFA

Breaking Estimate Short Candidates: Upstart, Cerence, Zillow, Trex

This model uncovers companies facing recent declines in estimates. This week we flag: : Upstart, Cerence, Zillow, and Trex

Eric Fernandez, CFA

Breaking Estimate Short Candidates: Nutanix, Upstart, Ubiquiti, Corsair Gaming

This model uncovers companies facing recent declines in estimates. This week we flag: Nutanix, Upstart, Ubiquiti, Corsair Gaming

Eric Fernandez, CFA

Upstart Holdings: Slowdown In Revenue Growth And Tightening Of Credit Markets

We think investors should be cautious on Upstart shares due to the slowdown in revenue growth rates and the tightening of credit markets

Andrei Zakharov

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52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Short Ideas on Our Workbench: Earnings Quality

Our "Workbench" focuses exclusively on potential earnings quality shorts. We continue to work on these names. Today we highlight ten names of...

Eric Fernandez, CFA

Breaking Estimate Short Candidates: Upstart, Cerence, Zillow, Trex

This model uncovers companies facing recent declines in estimates. This week we flag: : Upstart, Cerence, Zillow, and Trex

Eric Fernandez, CFA

Breaking Estimate Short Candidates: Nutanix, Upstart, Ubiquiti, Corsair Gaming

This model uncovers companies facing recent declines in estimates. This week we flag: Nutanix, Upstart, Ubiquiti, Corsair Gaming

Eric Fernandez, CFA

Upstart Holdings: Slowdown In Revenue Growth And Tightening Of Credit Markets

We think investors should be cautious on Upstart shares due to the slowdown in revenue growth rates and the tightening of credit markets

Andrei Zakharov

Upstart Holdings: Fast-Growing, Profitable, Cash Generative with Share Buybacks

Upstart is a rare fintech that has established credibility by delivering high growth with profits and cash generation. The tech sell-off is an...

Arun George