Key Points
- Upstart has returned to profitability with growing loan originations and market share, though high short interest reflects lingering risk around interest rates.
- Sezzle's revenue and subscriber base are growing rapidly amid rising buy-now-pay-later demand, but its elevated valuation has prompted some analyst downgrades.
- Intuitive Machines posted record quarterly revenue and a growing backlog tied to NASA missions, despite negative operating cash flow and shareholder dilution.
- Special Report: I'm giving you a space stock today. Free.
When identifying potential growth stock candidates, investors often look for companies with a competitive moat—some advantage in technology, product offerings, efficiency, or similar that gives them a likely edge over their rivals. It can also help to look at smaller, specialized industries, where the competitive landscape may be different and it might be easier to find a profitable niche.
The firms below—Upstart Holdings Inc. (NASDAQ: UPST), Sezzle Inc. (NASDAQ: SEZL), and Intuitive Machines Inc. (NASDAQ: LUNR)—all demonstrate some combination of potential for revenue and earnings growth, a compelling addressable market, and appealing growth vectors while also operating in more specialized industries.
Upstart's Return to Profitability May Justify Optimism, Despite High Short Interest
Upstart's AI-fueled lending tools connect borrowers with banks and automate credit underwriting. As lenders look to become more efficient with AI tools, Upstart has positioned itself advantageously: more than 91% of all loans on its platform were fully automated last year.
Personal loans have become an increasingly important part of Upstart's business as consumers have been squeezed by higher prices—core personal loan originations climbed by 27% on a sequential basis last quarter, while unsecured contribution margin climbed by 6% to 62%.
Overall, for the latest quarter, originations were up substantially (about 50% relative to the prior-year quarter), and revenue scaling has actually outpaced underlying loan volume.
The company has also returned to profitability after challenges earlier in the 2020s, and it enjoys a strong outlook for the full year.
Perhaps most importantly, Upstart's market share is significant and growing. Cumulatively, it has originated more than $61 billion in loans, and it has more than 100 bank partners and 6 million originations. As it continues to explore auto, home, and other types of lending, this is likely to keep growing, despite challenges in the real estate market.
An investment in Upstart is certainly a risk at a time of uncertainty in the credit cycle and with interest rates fluctuating. This may explain the stock's high level of short interest at about 33.8% of the float. Elevated short interest, while concerning, could be advantageous to investors who agree, along with Wall Street, that shares have massive upside potential.
Sezzle's Business Is Booming, But Risks Remain
Difficult economic conditions for consumers have led to a massive increase in the use of buy-now-pay-later products and loans, which has been critical to Sezzle's recent success.
Gross merchandise volume (GMV) climbed by 38% year over year (YOY) for Q2 2026 to a record $1.3 billion. Revenue climbed by an even wider margin of 52% over the same period.
The company is now anticipating 35% YOY revenue growth for the full year, an increase over prior predictions.
Driving Sezzle's growth is its active subscriber base, which climbed by more than 76% YOY to 854,000 last quarter.
Customers are not only becoming more plentiful, but they're also purchasing items using Sezzle more often as well, up to an average of 7.2 times per quarter. On top of this, the company continues to expand its offerings beyond point-of-sale settings.
One thing for investors to watch out for is the company's valuation. Even after a volatile year, shares are up about two-thirds year to date and trade at roughly 24x trailing earnings, above the typical lender, though closer to 21x the company's 2026 earnings guidance. Some analysts downgraded the stock this summer, citing its elevated valuation. Beyond price, concerns about regulation, competition, and potential credit losses may also be worth considering.
Intuitive Machines Is Spending Lots of Cash to Do Exciting Things
Intuitive Machines is a niche space company with a mission-critical service: helping to support payload protection, landers, telemetry, and other technologies vital to moon-based missions. The firm has close ties with the government via NASA's Artemis mission, among others.
Although Intuitive reported lower-than-expected revenue for the most recent quarter, it still demonstrated record growth.
Q2 revenue was $206 million, which was more than four times the size of this figure just a year earlier.
At the same time, backlog improved significantly to $1.8 billion, while bookings came in at $1.7 billion for the first half of 2026.
Intuitive is seeing demand increase across civil and commercial clients on top of its existing government and national security operations. This may stay the case as the company looks to expand its satellite program.
Of course, all of this requires substantial cash, and investors may balk at operating cash flow of negative $60 million last quarter, on top of $84 million in deployed capital. At-the-market equity programs have helped build a cash reserve but have also diluted shareholders' positions. That hasn't been enough of a concern across Wall Street to stop analysts from assigning a Moderate Buy rating overall, alongside 91% in predicted upside for LUNR shares.
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