Upstart Holdings (UPST) is jumping 29% in early trading after the company reported much better-than-expected fourth-quarter results and provided full-year guidance that also came in well above analysts' average estimates. The company's software platform uses AI to determine suitable candidates for loans.

A Look at UPST's Q4 Results

The firm reported Q4 earnings per share, excluding certain items, of 26 cents, way above analysts' average estimate of a loss per share of 4 cents. In Q4 of 2023, it generated a per-share loss of 11 cents. On the top line, UPST reported revenue of $219 million for last quarter, versus the mean outlook of $181.9 million. Its sales jumped 56% in Q4 compared with the same period a year earlier.

A close-up of a businesswoman using a laptop, being illuminated by the AI-enabled cloud interface sponsored by the company.

UPST's 2025 Guidance and Comments

For all of 2025, UPST predicts that its revenue will come in at roughly $1 billion, meaningfully higher than analysts' average estimate of $823 million heading into the print. Moreover, the tech firm estimates that its adjusted EBITDA margin will be about 18%, well above the average estimate of 13%.

"In Q4 of 2024, our business grew dramatically across all product categories (and) delivered Adjusted EBITDA at levels not seen since the first quarter of 2022," Co-Founder and CEO Dave Girouard said in a statement.

While we acknowledge the potential of UPST, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than UPST but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.