Due to misreading how upset Wall Street would become about rising interest rates, in my last column on Upstart (NASDAQ:UPST) stock, my recommendation that investors consider buying the stock proved to be premature.

Still, after another 30% retreat by the name and amid multiple signs that the Street is warming up to the shares, I’m more bullish on the name than I was when my previous column was published on Jan. 3.

Also importantly, I remain very upbeat on Upstart’s fundamentals and long-term outlook. UPST looks like a solid long-term play.

Here’s why.

The Street Is Warming up to UPST Stock

InvestorPlace contributor Ian Bezek, a former Street analyst, was once very bearish on Upstart. But in the wake of the stock’s recent plunge, even Bezek is becoming more upbeat on the name.

In a Jan. 12 column, he wrote, “What makes UPST stock potentially viable, at least as a name to trade, is that the company earns money.” He added that “Upstart is not as bad of a company as many of the other so-called disruptive stocks.”

On the other hand, Bezek does not expect the shares to be over $100 in the “long term.” He wrote that “Upstart’s IPO price was just $20 per share not too long ago, after all.” But the fact that he’s much more optimistic on the stock’s outlook than he once was suggests that the Street is likely to view the shares more favorably in the days and weeks ahead.

In other indications that the market is becoming more upbeat on Upstart, a research firm recently issued a largely favorable note on the name.

On Jan. 13, Piper Sandler (NYSE:PIPR) kept an “overweight” rating on Upstart. Analyst Arvind Ramnani indicated that he views Upstart as one of the better names in the “vertical software and fintech sector.” Ramnani remained upbeat on the “higher quality names” in the sector and cut his price target on the shares “to $223 from $300,” The Fly noted. But that target is still more than double Upstart’s current price.

Upstart Is Very Different From Many Other Growth Stocks

As Bezek noted one characteristic that distinguishes Upstart from some other growth names is its profitability. Indeed, in the 12 months that ended in September, the company’s operating income came in at $96 million.

In my view, the firm’s profitability, along with Upstart’s exceptionally rapid revenue growth (its top line soared nearly 1,000% year-over-year in the third quarter) indicates that the company’s offerings are seen as quite valuable. And, the company must have some important comparative advantages in its target market. Combined with the company’s extremely strong revenue growth, of course, all indicates that its solutions are quickly proliferating.

Upstart’s profitability distinguishes it from names like Palantir (NYSE:PLTR) and Teladoc (NYSE:TDOC), whose large losses suggest that their products are not seen by their target markets as being uniquely valuable.

Of course, Upstart is in a completely different category than companies that generate very few sales. Such as Virgin Galactic (NYSE:SPCE) and Lordstown Motors (NASDAQ:RIDE).

And unlike, say, GameStop (NYSE:GME) and AMC (NYSE:AMC), Upstart is not facing huge threats, its shares weren’t propelled much higher primarily by retail investors, and it’s not in the midst of a turnaround.

 The Bottom Line on UPST Stock

The shares are trading at a forward price-earnings ratio of 48, based on analysts’ average 2022 EPS estimate. With Upstart starting to disrupt personal lending for small and medium banks, as well as the auto loan sector, that’s a tiny valuation. Also notable is the fact that Upstart’s offerings allow lenders to profitably provide loans to many more consumers. This greatly increases their top and bottom lines. Consequently, the company’s products are quite valuable.

Also striking is that, despite Upstart’s huge potential, the market capitalization of UPST stock is a relatively paltry $7.2 billion. Consequently, I believe that the shares have a great deal of room to run in the coming months and years.

This makes UPST stock a good investment for those with a long time horizon.

On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Larry Ramer has conducted research and written articles on U.S. stocks for 14 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015.  Among his highly successful, contrarian picks have been Ford, solar stocks, and Plug Power. You can reach him on StockTwits at @larryramer.