BTIG analyst Vincent Caintic has maintained their neutral stance on UPST stock, giving a Hold rating today.
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Vincent Caintic has given his Hold rating due to a combination of factors that emerged from Upstart Holdings’ recent investor day. The company demonstrated its competitive edge through significant metrics, such as a 50% higher win rate and a 50% reduction in customer acquisition costs, alongside a high level of automation in loan processing. These factors suggest potential growth in transaction volumes, possibly reaching $4-$5 billion by the end of 2025, which is above current consensus estimates.
However, Caintic expresses concern over the potential downside risk to fee take rates. While transaction volumes might exceed expectations, the revenue estimates remain unchanged, indicating a possible decline in fee revenue take rates. This uncertainty, coupled with the fintech industry’s trend of lower take rates, makes it challenging to predict the stock’s performance. Despite the positive outlook for Upstart’s long-term growth and resilience, particularly in funding commitments, the short-term uncertainties lead to a Hold rating as the time horizon considered is only 12 months.
Caintic covers the Financial sector, focusing on stocks such as American Express, Capital One Financial, and Ally Financial. According to TipRanks, Caintic has an average return of -0.6% and a 45.77% success rate on recommended stocks.
In another report released today, Bank of America Securities also maintained a Hold rating on the stock with a $53.00 price target.