JPMorgan upgrades Upstart stock rating to Overweight despite price target cut

Published 20/08/2025, 09:24
JPMorgan upgrades Upstart stock rating to Overweight despite price target cut

Investing.com - JPMorgan has upgraded Upstart Holdings Inc (NASDAQ:UPST) from Neutral to Overweight while slightly reducing its price target to $88.00 from $93.00. According to InvestingPro data, the company currently trades at $61.59, with an impressive revenue growth of 53.6% over the last twelve months, though currently appears overvalued based on Fair Value analysis.

The upgrade comes despite Upstart shares underperforming year to date, declining approximately 20% since reporting second-quarter results. JPMorgan attributes this decline primarily to concerns around balance sheet growth and a new convertible issuance. InvestingPro data shows the stock has experienced high volatility, with a beta of 2.39 and a significant 60.5% return over the past year. For deeper insights into Upstart’s volatility patterns and 12+ more exclusive ProTips, consider an InvestingPro subscription.

The investment bank notes that Street estimates for 2026 revenue and adjusted EBITDA have increased significantly this year, up 37% and 87% respectively, indicating underlying business strength despite share price weakness.

JPMorgan’s $88 December 2026 price target represents approximately 35% upside from current levels and applies a 6.5x price-to-sales multiple to its 2027 estimates. This multiple represents a half-turn premium to Upstart’s trailing twelve-month average.

The firm expressed a positive outlook on more seasoned fintech lenders given the favorable macroeconomic backdrop, including stable credit conditions and potential interest rate cuts, while noting that loan buyer demand for Upstart remains strong.

In other recent news, Upstart Holdings Inc. reported impressive second-quarter results for 2025, exceeding both revenue and earnings expectations. The company achieved GAAP profitability, marking its first profitable quarter since 2022, with earnings per share at $0.36, which was 50% above the forecasted $0.24. Revenue reached $257 million, surpassing projections by 14%. Following these results, Needham raised its price target for Upstart to $82 from $70, maintaining a Buy rating. Additionally, Upstart announced the pricing of $600 million in 0% Convertible Senior Notes due 2032, an increase from the initially planned $500 million. This offering includes an option for initial purchasers to buy an additional $90 million in notes. Furthermore, Upstart has formed a partnership with ABNB Federal Credit Union to expand personal loan offerings through AI technology. These developments reflect Upstart’s strategic initiatives and positive financial performance.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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