Analyst Ken Shih of DBS maintained a Hold rating on Upstart Holdings (UPST – Research Report), with a price target of $52.00.
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Ken Shih has given his Hold rating due to a combination of factors influencing Upstart Holdings. The company’s first-quarter revenue showed impressive growth, surpassing expectations with a 67% year-over-year increase, driven by stronger platform originations and improved conversion rates. However, the guidance for the second quarter was less optimistic, with potential macroeconomic challenges such as re-inflation posing risks to consumer affordability and potentially capping growth.
Despite these concerns, Upstart’s expansion into auto and home products and its AI-driven credit scoring system are seen as long-term growth drivers. The company’s recent improvements in its AI model have enhanced prediction accuracy, which could benefit loan origination. Nevertheless, the soft guidance for the second quarter reflects caution amid uncertain credit conditions, and the absence of expected rate cuts adds to the uncertainty. Therefore, the Hold rating is maintained with a target price of USD 52, balancing the strengths of the AI-led underwriting model against macroeconomic risks.
According to TipRanks, Shih is a 5-star analyst with an average return of 15.5% and a 76.47% success rate. Shih covers the Financial sector, focusing on stocks such as AIA Group, Manulife Financial, and China Life Insurance Co.
In another report released yesterday, Barclays also maintained a Hold rating on the stock with a $47.00 price target.