Citi, JPMorgan, and Piper Sandler have upgraded their ratings and raised their price targets on Upstart.
The stock peaked at $79.64 after the company significantly exceeded third-quarter earnings expectations, reporting a loss of just $0.07 per share, far better than the anticipated $0.48 loss.
Upstart, an AI-powered lending platform, also exceeded revenue expectations, posting $162.1 million in revenue, surpassing the estimated $149.3 million.
Analysts have become more optimistic about Upstart’s prospects with Citi upgrading the stock to ‘Buy’ from ‘Neutral’ and raising the price target to $87 from $56.
The brokerage cited growing interest from private credit managers and Upstart’s partner network due to improved liquidity that could lead to better stock performance.
Meanwhile, JPMorgan has upgraded Upstart to ‘Neutral’ from ‘Underweight’ and increased the price target to $45 from $30.
With steady improvement in loan performance and new originations expected to generate higher returns, JPMorgan believes Upstart has emerged from challenging times.
Piper Sandler also upgraded Upstart, this time to ‘Overweight’ from ‘Neutral’, with a price target of $85, up from $31.
The brokerage expects Upstart to benefit from an accommodating rate environment, improved lending conditions, and updates to its lending model.
It also noted the company’s strategic partnership with Blue Owl, which will enable Upstart to purchase up to $2 billion in loans over the next 18 months.
Upstart has guided for revenue of about $180 million and a loss of about $35 million in the fourth quarter.
Retail sentiment on Stocktwits improved to ‘extremely bullish’ (95/100) from ‘bullish’ a day ago with ‘extremely high’ (96/100) chatter.
Upstart CEO Dave Girouard struck a bullish tone amid third-quarter results. “Even without a significant boost from the macroeconomy, we’re back in growth mode,” he said during the earnings call.
The stock has more than doubled in value this year with gains of 104% so far.
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