Consumer lending platform Upstart Holdings (UPST) delivered better-than-expected results for the fourth quarter of 2024 and issued an upbeat outlook for the first quarter. UPST stock jumped about 32% on Wednesday, as investors cheered the performance of the lending marketplace that leverages AI (artificial intelligence) to assess borrowers’ creditworthiness. Following the print, several analysts raised their price targets for Upstart stock, while analysts at JPMorgan and B. Riley Financial upgraded their ratings.
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Upstart Stock Earns Rating Upgrades
Reacting to the impressive performance, B. Riley analyst Hal Goetsch upgraded Upstart Holdings stock to Buy from Hold and boosted the price target to $105 from $49. The analyst stated that he was raising his estimates substantially after a very strong Q4 2024 that saw a “striking acceleration” in growth and crushed estimates.
Goetsch expects the company’s revenue growth to accelerate to over 57%, compared to 24% in 2024, driven by an improving macro environment and a scalable fee-based model.
Further, JPMorgan analyst Reginald Smith upgraded UPST stock to Hold from Sell and raised the price target to $79 from $57, citing a rebound in origination volume and adjusted EBITDA margins to their highest levels since 2022. Smith explained that these metrics gained from improving conversion rates and funding availability, driven by underwriting model enhancements and a better macro backdrop.
Smith added that he is optimistic about the opportunity for conversion rate improvement throughout this year, which could boost Upstart’s FY25 revenue and adjusted EBITDA outlook. That said, he remains cautious, given the need for a stable macro environment and continued funding availability.
Is UPST Stock a Buy?
Even after these rating upgrades, Upstart Holdings stock has a Hold consensus rating based on six Buys, six Holds, and three Sell recommendations. Shares have risen 150% over the past year. The average UPST stock price target of $76.86 implies 13.4% downside risk.
However, there could be additional changes to analysts’ ratings and price targets based on the company’s robust results.
