On Wednesday, Citi analyst Peter Christiansen increased the price target on Upstart Holdings Inc (NASDAQ:UPST) shares to $108.00, up from the previous $87.00, while reiterating a Buy rating on the stock. Currently trading at $67.34 with a market capitalization of $6.14 billion, Upstart has shown remarkable volatility, as noted by InvestingPro data. Christiansen highlighted the company’s significant turnaround since a revenue miss reported in the second quarter of 2022. Upstart has recently reported a 21% revenue beat for the fourth quarter of 2024 and provided an initial forecast for approximately 60% growth in the fiscal year 2025. This ambitious growth target comes as the company maintains strong revenue growth of 10.89% over the last twelve months, though InvestingPro analysis indicates the company is currently trading above its Fair Value.
The analyst expressed optimism regarding Upstart’s current trajectory and confidence, noting the company’s proactive approach in issuing discretionary capital ahead of potential new capital deals, which might include asset-backed securities. Christiansen pointed out that Upstart’s artificial intelligence had previously shown success in risk separation, a trend expected to continue with the integration of its UMI and PTCC models. These enhancements aim to improve the company’s ability to adjust to macroeconomic factors.
According to Christiansen, back testing of the models indicates that approximately 55% of excess loan defaults could have been prevented in the previous cycle if recalibrations had been made 12 months earlier. This suggests a significant improvement in the company’s risk management capabilities.
Upstart plans to further elaborate on these model additions during its AI investor day, scheduled for May 14 in New York City. The event is anticipated to provide investors with deeper insights into the company’s technology and growth strategy moving forward.
The stock’s new price target reflects a positive outlook on Upstart’s ability to leverage its enhanced AI models to drive future growth and manage risk more effectively in a dynamic economic environment. For investors interested in deep-dive analysis of Upstart’s AI capabilities and financial metrics, InvestingPro offers a comprehensive research report with detailed insights into the company’s technology strategy and growth potential, along with 8 additional ProTips that could inform investment decisions.
In other recent news, Upstart Holdings has been in the spotlight with Mizuho (NYSE:MFG) Securities raising its stock price target to $110 from $90, maintaining an Outperform rating. This adjustment is based on Upstart’s improved financial outlook and the potential for continued outperformance. Upstart has recently indicated a 20% rise in its revenue guidance for fiscal year 2025, despite the challenging economic environment and high cost of capital.
The company also reported robust Q4 2024 financial results with revenue of $219 million, a 56% increase YoY, significantly exceeding analyst expectations. Upstart’s adjusted EPS came in at $0.26, while its GAAP EPS of -$0.03 missed the analyst estimate of -$0.04. For the first quarter of 2025, Upstart anticipates revenue of approximately $200 million, above the consensus estimate of $184.6 million.
These are recent developments that are noteworthy. The company’s full-year 2025 revenue projection of about $1 billion also outpaces analyst expectations. Despite a GAAP net loss of $2.8 million for the quarter, Upstart’s strategic initiatives, potential for more efficient underwriting, and strong financial guidance are expected to drive its continued outperformance in the market.
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