In Monday's trading, 10 new stocks entered Barchart’s Top 100 Stocks to Buy. Leading the way was Better Home and Finance Holding Co. (BETR), entering in the 71st spot.
The company's Tinman AI mortgage platform has captured investor interest, resulting in a 559% gain in 2025, although it has since fallen back from its all-time high of $94.06, reached a week ago yesterday.
I have not followed the stock or its business since it went public in August 2023 through a merger with Aurora Acquisition Corp., a special purpose acquisition company (SPAC).
Although Better first announced the combination in May 2021, it was delayed by more than a year due to an investigation into whether Better violated securities laws. The SEC determined it had not.
On Aug. 23, 2023, the day before the merger, the SPAC’s stock closed at $17.44. By the end of the week, its shares closed at $1.19. On Aug. 19, 2024, it completed a 1-for-50 reverse stock split to meet Nasdaq listing compliance.
So, how does a stock that went through a 1-for-50 reverse stock split jump by over 230% over the next 13 months? Good question.
Should you buy BETR stock now that it’s in Barchart’s top 100 stocks to buy? I’d say probably not, but let me run through the facts before condemning the former penny stock.
How Does Better Compare to Upstart?
The first thing I thought as I read some of Better’s documents is that it sounds like a smaller version of Upstart Holdings (UPST).
However, let’s consider this assumption more closely.
In its purest form, Upstart uses AI to help lenders evaluate a borrower’s creditworthiness beyond traditional credit scores. That’s helped it grow revenues by 87% from $472.4 million in June 2021 to $884.8 million in June 2025. Its growth would have been higher if not for a terrible year for lending in 2023.
In Better’s situation, unlike Upstart, which primarily serves banks and credit unions by offering personal, auto, and HELOC (home equity lines of credit) loans, Better focuses on homeownership-related products, such as mortgages, title insurance, and HELOCs.
In 2024, Better’s revenues were $108.5 million, up from $72.3 million a year earlier. Approximately 72% of the revenue is from selling loans to its network of loan purchasers. In 2024, its loan volume was $3.6 billion, indicating that it generates a small amount of revenue from a large number of loans.
Where they are similar is that they both provide consumers with technology platforms that automate the loan process, leading to the origination of loans, but keeping these loans off their balance sheets as much as possible.
In other words, they both generate a majority of their revenue from loan origination and other ancillary fees, rather than from interest income on loan portfolios.
They are most definitely not banks.
Neither Has Consistent Profits
On a trailing 12-month basis, Upstart’s revenues haven’t been greater than expenses since September 2022 ($11.8 million), according to S&P Global Market Intelligence. For Better, it was September 2021 ($16.2 million).
So, what is it that sets Upstart apart? After all, it has a market cap of $5.07 billion, which is six times higher than Better’s at $840.4 million.
Upstart’s definitely aided by analyst coverage. Sixteen cover it, with seven rating it a "Buy," six a "Hold," and three a "Sell," according to MarketWatch. To the best of my knowledge, there are no Wall Street analysts covering Better.
If you’re looking for a home run, it might work to your advantage that Better has little to no Wall Street coverage. Should it get its act together, the increased coverage would be a massive boost to its share price.
However, Better needs to demonstrate that its business model is effective in all economic environments. To date, that’s not been the case.
The Opendoor Connection
Can you say, “meme stock?” I thought you could.
The rocket fuel boosting BETR stock in recent days was the Sept. 22 revelation by Canadian hedge fund manager Eric Jackson that his firm, EMJ Capital, had taken a stake in the New York-based Better.
I had never heard of Jackson until I saw a Bloomberg article about the hedge fund manager standing outside Drake’s Toronto mansion for 29 straight days in hopes of convincing the music star to invest in Opendoor Technologies (OPEN), another meme stock he backs.
Jackson believes that Better will become the “Shopify of mortgages.” Barchart contributor Aditya Raghunath recently discussed Jackson and the potential he sees for the stock. We’ll see about his prediction.
I discussed Opendoor in a Sept. 12 article. Specifically, I highlighted the company’s massive accumulated deficit of $3.84 billion and its inability to find a pathway to consistent profitability. Its stock is down over the past two weeks. I remain in the bearish camp.
The one thing Better has in common with Opendoor, aside from competing in the real estate market, is that they both have massive accumulated deficits — Better's was $2 billion as of June 30.
That’s not a good thing.
Only Aggressive Investors Need Apply
All those involved with Better stock, whether it be management, regular work-a-day investors, or even meme-stock followers, believe the company will ultimately turn the corner and deliver massive profits and shareholder returns.
Nothing wrong with that.
I can’t say whether we’ll be having a different discussion ten years from now. Nobody can. However, the markets are currently excessively frothy, prompting investors to pile into stocks they have no business owning.
Is Better Home and Finance Holding Co. such a beast? I wouldn’t go that far, but I would say only the most aggressive investors should consider buying BETR stock.
Remember, without the 1-for-50 reverse stock split, it would still be considered a penny stock.
Happy investing!
On the date of publication, Will Ashworth did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
