Mizuho raises Upstart stock price target to $110 from $90

Wednesday - Mizuho (NYSE:MFG) Securities has increased the price target for Upstart Holdings Inc (NASDAQ:UPST) shares to $110, up from the previous $90, while maintaining an Outperform rating on the stock. The firm’s analyst cited Upstart’s improved financial outlook and the potential for continued outperformance as the basis for the adjustment. Currently trading at $67.34 with a market capitalization of $6.14 billion, Upstart maintains a strong gross profit margin of 74.62% despite challenging market conditions. InvestingPro data reveals the company’s impressive revenue growth of 10.89% over the last twelve months.

Upstart, known for its artificial intelligence lending platform, has recently indicated a 20% rise in its revenue guidance for the fiscal year 2025 compared to consensus estimates. The company also aims to achieve GAAP net income breakeven for the fiscal year. This financial forecast comes despite the Upstart Macro (BCBA:BMAm) Indicator (UMI) remaining high at 1.4, indicating a challenging economic environment and a high cost of capital. InvestingPro analysis highlights that while the company maintains a robust current ratio of 13.41, suggesting strong liquidity, analysts do not anticipate profitability this year - one of several key insights available in the comprehensive Pro Research Report.

The analyst noted that Upstart’s stock experienced a significant increase following an upgrade from Underperform to Outperform in July 2024, when the stock was trading at approximately $26. The price surged to nearly $85 in after-hours trading following the latest results. The analyst believes there is still room for growth, suggesting that a return to a more normal economic environment combined with improved risk models could enhance the company’s ability to underwrite and support further stock gains.

Mizuho’s updated price target reflects these expectations, with the analyst expressing confidence in Upstart’s ability to navigate the current macroeconomic challenges. The firm anticipates that Upstart’s strategic initiatives and the potential for more efficient underwriting will drive the stock’s continued outperformance in the market.

The announcement follows Upstart’s after-hours trading performance, where its stock price approached $85, underscoring the company’s robust post-results momentum. The increase in the price target to $110 from $90 is an acknowledgment of Upstart’s strong financial guidance and the anticipated positive impact on its stock value in the near future. According to InvestingPro’s Fair Value analysis, the stock appears overvalued at current levels. Investors seeking deeper insights can access the full Pro Research Report, which provides comprehensive analysis of Upstart’s financials, market position, and growth prospects, along with 8 additional ProTips not mentioned here.

In other recent news, Upstart Holdings, Inc. reported robust Q4 2024 financial results, with revenue of $219 million, significantly surpassing the analyst consensus of $182.07 million and marking a 56% increase year over year. The AI-powered lending platform also reported an adjusted EPS of $0.26, with a GAAP EPS of -$0.03. Looking ahead, Upstart anticipates a Q1 2025 revenue of approximately $200 million and a full-year 2025 revenue projection of about $1 billion, both figures exceeding analyst expectations.

The company also saw substantial growth in transaction volume, with 245,663 loans originated in Q4, totaling $2.1 billion, a 68% increase year over year. The company’s conversion rate improved to 19.3%, up from 11.6% in Q4 2023. Adjusted EBITDA for Q4 2024 reached $38.8 million, a significant improvement from $0.6 million in the same quarter of the previous year.

Despite the strong revenue performance, Upstart reported a GAAP net loss of $2.8 million for the quarter, an improvement from the $42.4 million loss in Q4 2023. These are among the recent developments for the company.

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