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On Wednesday, Citi analysts adjusted the price target for Upstart Holdings Inc (NASDAQ:UPST) shares, reducing it to $83 from the previous target of $108, while reiterating a Buy rating on the stock. Currently trading at $51.40 with a market capitalization of $4.89 billion, Upstart has demonstrated significant volatility, as highlighted by InvestingPro data. The revision follows Upstart’s first-quarter results of 2025, which showed performance that exceeded Citi and broader market expectations in several key areas.
Upstart’s quarterly results demonstrated a 7% to 10% outperformance in originations compared to Citi and street forecasts. With a robust gross profit margin of 76.66% and year-over-year revenue growth of 23.43%, the company’s fee revenue aligned with projections, and it surpassed Citi and street estimates for adjusted EBITDA by a significant margin of 57% and 58%, respectively. Additionally, Upstart announced a new $1.2 billion one-year forward flow agreement with Fortress, representing about 10-11% of the full-year 2025 volume anticipated by Citi and consensus estimates. The firm also confirmed a recent $320 million asset-backed securities (ABS) deal and provided details about its distribution agreement with Walmart (NYSE:WMT)’s OnePay.
Despite these positive outcomes, Upstart’s stock experienced a decline in after-hours trading. This was attributed to the company not meeting the higher estimates set by a popular third-party data forecasting service, which were considerably above the consensus.
In response to the quarterly results and market conditions, Citi analysts have modestly increased their full-year 2025 estimates for Upstart. However, they have lowered the price target to $83, reflecting the uncertainties related to the macroeconomic environment in the second half of 2025 and the current risk-averse sentiment in the market. The Buy rating was maintained due to Upstart’s more stable funding sources, such as private credit, and its continued stable credit performance, despite the lowered price target.
In other recent news, Upstart Holdings Inc. reported its first-quarter 2025 financial results, revealing a notable performance. The company achieved an adjusted earnings per share (EPS) of $0.30, significantly surpassing the projected $0.17. Revenue also exceeded expectations, reaching $213 million compared to the forecasted $201.13 million, marking a 67% year-over-year increase. Despite these positive results, Upstart’s stock experienced a decline post-earnings call. The company has projected second-quarter revenue of $225 million and set a full-year 2025 revenue target of $1.01 billion. Additionally, Upstart announced a new partnership with Walmart’s One Pay, aiming to expand its offerings. Analysts from firms like Mizuho (NYSE:MFG) and Barclays (LON:BARC) have shown interest in Upstart’s strategic moves and model updates, which are expected to impact conversion rates and market presence. Upstart continues to focus on leveraging AI in its lending processes, with plans to enhance its product offerings further.
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