Upstart Holdings: Balancing AI Innovations with Market Challenges in a Hold Rating

Mihir Bhatia, an analyst from Bank of America Securities, maintained the Hold rating on Upstart Holdings (UPST – Research Report). The associated price target remains the same with $53.00.

Mihir Bhatia has given his Hold rating due to a combination of factors that reflect both the strengths and challenges facing Upstart Holdings. The company has showcased its advanced AI capabilities and strategic priorities, which enhance its macroeconomic resilience and offer a differentiated model in the lending market. However, while Upstart’s AI models have improved loan pricing and process automation, the company’s path to achieving its 2025 priorities, such as increasing AI advantages and returning to GAAP profitability, remains a work in progress.
Bhatia also notes that Upstart’s business model shows potential for growth and durability, with improvements in underwriting, pricing power, and funding resilience. Despite these positive developments, the valuation of Upstart’s stock, with a price objective closely aligned with its current trading price, suggests limited upside potential in the near term. This balanced view of promising innovations and existing market conditions underpins the Hold rating, indicating that investors should maintain their positions while monitoring future developments.

In another report released today, Barclays also maintained a Hold rating on the stock with a $47.00 price target.