Upstart (NASDAQ:UPST) Shares Down 7.8% - Time to Sell?

Key Points

• Shares fell 7.8% to about $30.30 on Wednesday with volume ~71% below average, pressured by multiple securities class‑action filings alleging misleading statements about the company's model performance (May–Nov 2025), increasing legal and settlement risk.
• Upstart secured a $1.25 billion forward‑flow commitment from Fortress to buy consumer loans over 15 months and analysts preview a likely earnings beat next week, which could act as a near‑term positive catalyst if results confirm upside.
• Wall Street remains mixed with a consensus rating of Hold (average target $48), while the company has authorized a $100 million buyback and still trades at an elevated valuation (PE ~73.6), highlighting both potential upside and high volatility.

Upstart Holdings, Inc. (NASDAQ:UPST - Get Free Report) fell 7.8% during trading on Wednesday . The stock traded as low as $29.80 and last traded at $30.2970. 1,447,314 shares traded hands during mid-day trading, a decline of 71% from the average session volume of 4,912,166 shares. The stock had previously closed at $32.86.

Upstart News Summary

Here are the key news stories impacting Upstart this week:

• Positive Sentiment: Upstart secured a forward‑flow commitment from Fortress Investment Group to purchase up to $1.25 billion of consumer loans originated on Upstart’s platform over 15 months — expands funding capacity and distribution for originations. Upstart Announces $1.25B Forward-Flow Agreement with Fortress Investment Group
• Positive Sentiment: Analyst previews (Zacks/Wall Street notes) indicate analysts expect earnings growth and that Upstart has the setup for a likely earnings beat next week — a potential near‑term catalyst if results confirm upside. Upstart Holdings, Inc. (UPST) Reports Next Week: Wall Street Expects Earnings Growth
• Neutral Sentiment: Unrelated market item included in the feed: an earnings preview for Houlihan Lokey (HLI) — not material to Upstart’s fundamentals. Earnings Preview: Houlihan Lokey (HLI) Q4 Earnings Expected to Decline
• Negative Sentiment: Multiple plaintiff firms have filed or are soliciting clients for securities class actions against Upstart and certain officers, alleging misleading statements about model performance during the May–Nov 2025 period; filings and repeated lead‑plaintiff notices (with a June 8, 2026 deadline) increase legal and settlement risk and have pressured the stock. Representative notices: Bronstein Gewirtz Grossman, Bernstein Liebhard, Pomerantz, Levi & Korsinsky, Berger Montague and others. Bronstein, Gewirtz & Grossman LLC Urges Upstart Holdings, Inc. Investors to Act: Class Action Filed Alleging Investor Harm
• Negative Sentiment: Additional law‑firm alerts and filings (Bernstein Liebhard, Pomerantz, Rosen, Faruqi & Faruqi, Levi & Korsinsky, Gross Law Firm, Berger Montague) reiterate similar allegations and call for lead‑plaintiff appointments — the volume of litigation notices magnifies reputational and litigation exposure. Pomerantz Law Firm Announces the Filing of a Class Action Against Upstart Holdings, Inc.and Certain Officers – UPST

Wall Street Analyst Weigh In

Several brokerages have commented on UPST. Zacks Research upgraded shares of Upstart from a "strong sell" rating to a "hold" rating in a report on Monday, April 13th. BTIG Research reaffirmed a "buy" rating and issued a $43.00 target price on shares of Upstart in a research report on Thursday, April 9th. Citigroup downgraded shares of Upstart from a "buy" rating to a "strong sell" rating in a research report on Friday, February 13th. Needham & Company LLC reaffirmed a "buy" rating and issued a $40.00 target price on shares of Upstart in a research report on Wednesday, March 11th. Finally, Compass Point raised shares of Upstart from a "sell" rating to a "neutral" rating and upped their target price for the stock from $20.00 to $30.00 in a research report on Tuesday, February 17th. Six equities research analysts have rated the stock with a Buy rating, seven have assigned a Hold rating and three have given a Sell rating to the company. According to MarketBeat.com, Upstart presently has a consensus rating of "Hold" and an average target price of $48.00.

Upstart Stock Performance

The stock's 50-day moving average price is $28.59 and its two-hundred day moving average price is $38.71. The stock has a market capitalization of $2.96 billion, a PE ratio of 73.56, a P/E/G ratio of 0.93 and a beta of 2.16.

Upstart (NASDAQ:UPST - Get Free Report) last released its earnings results on Tuesday, February 10th. The company reported $0.17 earnings per share for the quarter, topping analysts' consensus estimates of $0.15 by $0.02. The firm had revenue of $296.09 million for the quarter, compared to the consensus estimate of $288.54 million. Upstart had a net margin of 5.13% and a return on equity of 6.30%. The company's revenue was up 35.2% compared to the same quarter last year. During the same period in the prior year, the firm earned $0.26 EPS. On average, analysts predict that Upstart Holdings, Inc. will post 0.94 earnings per share for the current fiscal year.

Upstart announced that its Board of Directors has approved a stock buyback plan on Thursday, February 19th that permits the company to buyback $100.00 million in outstanding shares. This buyback authorization permits the company to purchase up to 3.2% of its shares through open market purchases. Shares buyback plans are generally a sign that the company's board believes its stock is undervalued.

Insider Buying and Selling

In related news, CFO Sanjay Datta sold 7,982 shares of the stock in a transaction dated Friday, February 20th. The shares were sold at an average price of $29.86, for a total transaction of $238,342.52. Following the sale, the chief financial officer directly owned 276,688 shares of the company's stock, valued at approximately $8,261,903.68. This represents a 2.80% decrease in their position. The sale was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Over the last quarter, insiders have sold 9,481 shares of company stock worth $282,201. Corporate insiders own 16.67% of the company's stock.

Institutional Trading of Upstart

Institutional investors have recently bought and sold shares of the company. Clearstead Advisors LLC purchased a new stake in Upstart during the 3rd quarter valued at about $25,000. Bayforest Capital Ltd purchased a new stake in Upstart during the 4th quarter valued at about $25,000. Quarry LP grew its position in Upstart by 749.2% during the 3rd quarter. Quarry LP now owns 501 shares of the company's stock valued at $25,000 after purchasing an additional 442 shares during the last quarter. Northwestern Mutual Wealth Management Co. grew its position in Upstart by 132.2% during the 3rd quarter. Northwestern Mutual Wealth Management Co. now owns 771 shares of the company's stock valued at $39,000 after purchasing an additional 439 shares during the last quarter. Finally, Empowered Funds LLC purchased a new stake in Upstart during the 4th quarter valued at about $40,000. 63.01% of the stock is owned by hedge funds and other institutional investors.

Upstart Company Profile

Upstart Holdings, Inc operates a cloud-based lending marketplace that leverages artificial intelligence and machine learning to assess borrower creditworthiness. The company partners with banks and credit unions, providing its proprietary AI models and underwriting platform to facilitate consumer credit products. By focusing on non‐traditional data points—such as education, employment history and other real‐time indicators—Upstart seeks to improve approval rates and lower loss rates compared with conventional credit scoring methods.

Upstart's core offering centers on unsecured personal loans, which borrowers can use for purposes such as debt consolidation, home improvements or major purchases.

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