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  5. PRL: I hold Upstart Holdings. [Propel Holdings Inc.]
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Investment Q&A

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Q: I hold Upstart Holdings. It is down 80% from when I bought it. I have continued to hold it as I am hoping it may bounce when rates go down. And with its AI model, am hoping it could do quite well when lending picks up. But I see you really like Propel Holdings and, while a Canadian company, it sounds like most of its business is in the US. Could you compare and contrast the two companies? Would you favor a swap from Upstart to Propel? I also hold Goeasy in the space. Thank you.
Asked by Kim on April 16, 2024
5i Research Answer:

Please reference our report on PRL (March 26). The main differences are size (PRL is less than half the size of UPST), profitability (PRL very profitable), growth (consistent for PRL, not even close for UPST), dividends (2.3% and growing for PRL and 0% for UPST), and quality/execution (PRL seems to know what it is doing, UPST has been all over the map). Valuation is attractive at PRL, less so at UPST because of its losses. UPST has been bleeding cash flow in the past two years. We like PRL better as a company but a stock comparison is trickier. UPST has a 36% short interest and has gone on huge runs before, either with interest rates views and/or short covering. It is a very high beta stock and trades on sentiment far more than fundamentals. But, if an investor wanted to sleep and night we would consider PRL much better overall.