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Investing.com - Goldman Sachs has assumed coverage on Upstart Holdings Inc (NASDAQ:UPST) with a Sell rating and a $71.00 price target, implying approximately 10% downside potential. According to InvestingPro data, the stock currently trades at $75.62, with a price-to-book ratio of 10.6x and has shown significant volatility with a beta of 2.37.
The investment bank maintained the previous Sell rating as analyst coverage transferred from Mike Ng, noting that the downside projection for Upstart compares to an average of approximately -0.01% downside for Goldman’s coverage universe.
Goldman Sachs recognizes Upstart as a leading marketplace lender with sophisticated machine learning models that enable better risk pricing compared to competitors, though it noted the company did not significantly outperform during the last period of consumer credit weakness.
Despite acknowledging Upstart’s positioning to avoid adverse credit selection in the marketplace lending space, Goldman cited concerns about limited progress in developing long-term consumer relationships.
The bank also expressed reservations about Upstart’s business model, describing the online personal loan market as competitive and indirect, with heavy reliance on cyclical third-party funding sources.
In other recent news, Upstart Holdings, Inc. reported its first-quarter 2025 earnings, revealing a significant earnings beat with an adjusted EPS of $0.30, surpassing the forecasted $0.17. The company’s revenue also exceeded expectations, reaching $213 million against a projected $201.13 million, marking a 67% year-over-year increase. Upstart’s quarterly results demonstrated a notable outperformance in originations, exceeding Citi and broader market expectations by 7% to 10%, and the company announced a new $1.2 billion forward flow agreement with Fortress. Despite these positive financial results, the stock experienced a decline in after-hours trading, attributed to unmet higher estimates from a third-party data service. Additionally, Citi analysts adjusted their price target for Upstart to $83 from $108, while maintaining a Buy rating, citing the macroeconomic environment’s uncertainties. Meanwhile, Needham reiterated a Buy rating with a $70 price target, reflecting confidence in Upstart’s strategy and growth potential. Furthermore, Upstart’s recent stockholder meeting ratified the appointment of Deloitte & Touche LLP as the independent accounting firm and approved executive compensation.
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