Mihir Bhatia, an analyst from Bank of America Securities, reiterated 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 surrounding Upstart Holdings’ recent performance and future projections. The first quarter results were solid, with the company exceeding expectations in loan originations and adjusted EBITDA. However, the guidance for the second quarter did not meet investor expectations, which led to some pressure on the stock price. Despite these challenges, Upstart’s expansion in secured and super-prime loans, as well as new funding partnerships, are seen as positive indicators for long-term stability.
Bhatia also noted that while the company’s revenue from fees was in line with expectations, the lower take rate and contribution margins were a concern. The growth in super-prime personal loans contributed to this pressure. Additionally, Upstart’s efforts to scale newer products like auto loans and HELOCs, although promising, are still in early stages and could impact margins in the near term. These mixed signals led to the reaffirmation of a Hold rating, as the positives are balanced by near-term uncertainties.
Bhatia covers the Financial sector, focusing on stocks such as Synchrony Financial, American Express, and Capital One Financial. According to TipRanks, Bhatia has an average return of 8.2% and a 60.61% success rate on recommended stocks.
In another report released today, Barclays also maintained a Hold rating on the stock with a $42.00 price target.