Is Upstart a good long term stock?
The financial health and growth prospects of UPST, demonstrate its potential to underperform the market. It currently has a Growth Score of C. Recent price changes and earnings estimate revisions indicate this would not be a good stock for momentum investors with a Momentum Score of F.
Though Upstart Holding is not profitable (and not expected to be in 2024), I think the fintech has a good shot of returning to profitability in 2025 which is when the central bank should be way into the next rate-cutting cycle.
Artificial intelligence (AI)-powered lending platform Upstart has originated $38 billion in loans across its 3 million customers — leaving lots of room to grow. That's why, on Tuesday's (May 7) first quarter 2024 earnings call, Upstart executives stressed to investors that the company's future is bright.
Upstart (NASDAQ:UPST) was among the hottest stocks in the pandemic-fueled bull run that ended in 2021. Today, Upstart trades 93% below all-time highs, but I believe it remains a compelling buy for value and contrarian investors and that it can recover some of its losses this year.
| Year | Prediction | Change |
|---|---|---|
| 2025 | $ 58.93 | 84.37% |
| 2026 | $ 108.64 | 239.93% |
| 2027 | $ 200.30 | 526.73% |
| 2028 | $ 369.30 | 1,055.51% |
UPST Stock 12 Month Forecast
Based on 15 Wall Street analysts offering 12 month price targets for Upstart Holdings in the last 3 months. The average price target is $18.29 with a high forecast of $28.00 and a low forecast of $9.00. The average price target represents a -38.95% change from the last price of $29.96.
Upstart has struggled to find footing amid higher interest rates, but things are improving for the lender. For one, more lending partners have come onto the platform, and there's increasing risk appetite from investors for Upstart's loans. Also, the next move in interest rates will be down rather than up.
Upstart Holdings (UPST -0.27%) stock lost 42% of its value in the first six months of 2024, according to data provided by S&P Global Market Intelligence. It continues to lose business and report losses, and investors don't see this ending any time soon.
In 2021, the consumer lender made 1.3 million loans worth $11.8 billion. However, rising rates have been a drag on the lender, which has seen loan volume plummet over the past two years. After a strong start in 2022, loans originations really began to drop off. Last year, Upstart made 437,000 loans worth $4.7 billion.
Investors had built up their expectations for this tech disruptor, so the stock has fallen that much harder. Sales have fallen off a cliff, and earnings have become losses. It's been almost three years since the beginning of the descent and seems like investors are losing patience for the chance of a rebound.
Should I sell my UPST stock?
Upstart Holdings stock has received a consensus rating of sell. The average rating score is and is based on 2 buy ratings, 16 hold ratings, and 39 sell ratings.
As of 2024-07-18, the Fair Value of Upstart Holdings Inc (UPST) is -68.33 USD. This value is based on the Peter Lynch's Fair Value formula. With the current market price of 30.91 USD, the upside of Upstart Holdings Inc is -321.1%. Note: valuation result may not be accurate due to the company's negative EPS.
Upstart had been reporting explosive growth and high profitability prior to inflation and the ensuing high interest rates, but that fell off a cliff when demand for loans fell and higher default rates spooked lenders.
For 2024, analysts expect Upstart's revenue to increase 5%, and the company expects its adjusted EBITDA to turn positive again in the fourth quarter. For 2025, they expect its revenue to grow 33% with a positive adjusted EBITDA margin of 7%. Based on those estimates, Upstart looks cheap at 4 times this year's revenue.
Key Points. Upstart is financially stable, though its business must improve. Potential rate cuts could be what the doctor ordered. Upstart is a high-risk, high-reward stock looking to turn the corner.
The Intrinsic Value of UPST stock (25.57 USD) is 15% less than its price (29.96 USD). The DCF Value of UPST stock (10.12 USD) is 66% less than its price (29.96 USD).
At least one forecast places Upstart at about $200 by 2025, more than five times the current trading price.
Largest shareholders include Vanguard Group Inc, BlackRock Inc., Susquehanna International Group, Llp, Susquehanna International Group, Llp, Morgan Stanley, VTSMX - Vanguard Total Stock Market Index Fund Investor Shares, D. E. Shaw & Co., Inc., Citadel Advisors Llc, NAESX - Vanguard Small-Cap Index Fund Investor Shares ...
Upstart did not have an upcoming stock split on the calendar as of mid-2023.
Analyst Price Targets
Based on analysts offering 12 month price targets for UPST in the last 3 months. The average price target is $18.29 with a high estimate of $28 and a low estimate of $9.
Why is Upstart so popular?
Upstart pioneered the application of artificial intelligence to lending, enabling a system that is dramatically more efficient and more accurate for both borrowers and lenders.
Upstart Overview
While many lenders on this list require a good to excellent credit score, Upstart is designed for those with poor credit. You can borrow between $1,000 and $50,000. Upstart is not a direct lender — it's a lending marketplace that can match you with eligible banks and credit unions when you apply.
| Company and ticker symbol | Performance in 2024 |
|---|---|
| Super Micro Computer (SMCI) | 188.2% |
| Nvidia (NVDA) | 149.5% |
| Vistra (VST) | 123.2% |
| Constellation Energy (CEG) | 71.3% |
| Year | Mid-Year | Year-End |
|---|---|---|
| 2030 | $60.61 | $62.87 |
| 2031 | $64.17 | $65.52 |
| 2032 | $66.93 | $68.40 |
| 2033 | $69.94 | $71.55 |
(Note: Upstart Holdings said its IPO was priced at $20 – the low end of its $20-to-$22 range – on 12 million shares, the same number of shares cited in the prospectus.)
