Analyst James Faucette of Morgan Stanley maintained a Hold rating on Upstart Holdings (UPST – Research Report), retaining the price target of $50.00.
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James Faucette’s rating is based on several key considerations. Upstart Holdings has made notable improvements to its model, which could have significantly reduced loss rates in the past two years. These enhancements, along with increased funding and a more diverse borrower base, are promising. However, Faucette emphasizes the need for these improvements to be tested under stress conditions to ensure consistent credit performance.
Furthermore, Upstart’s shift towards prime borrowers, who benefit from competitive pricing and faster loan processing, is a positive development. The company’s automation advancements and potential introduction of revolving credit products could further stabilize its financial metrics. Despite these encouraging signs, Faucette maintains a Hold rating due to the stock’s high trading multiple and the need for sustained evidence of the model’s effectiveness before becoming more optimistic about the company’s prospects.
According to TipRanks, Faucette is a 5-star analyst with an average return of 5.5% and a 64.60% success rate. Faucette covers the Technology sector, focusing on stocks such as Endava, Block, and Shift4 Payments.
In another report released on May 15, Bank of America Securities also maintained a Hold rating on the stock with a $53.00 price target.