Upstart (NASDAQ:UPST) Shares Gap Up After Analyst Upgrade

Key Points

• Upstart shares jumped 5.6%, opening at $34.60 after Needham raised its price target from $40 to $42 and maintained a “buy” rating.
• Analyst sentiment remains mixed: eight analysts rate the stock a buy, seven a hold and two a sell, resulting in an overall “hold” rating and an average price target of $44.40.
• Upstart reported approximately $364.7 million in quarterly revenue, up 41.9% year over year and above estimates, although reported EPS of $0.16 missed consensus by $0.03. Insider activity was mixed, with a large director purchase but net insider selling in the recent quarter.

Upstart Holdings, Inc. (NASDAQ:UPST - Get Free Report) shares gapped up before the market opened on Wednesday after Needham & Company LLC raised their price target on the stock from $40.00 to $42.00. The stock had previously closed at $30.32, but opened at $34.60. Needham & Company LLC currently has a buy rating on the stock. Upstart shares last traded at $32.68, with a volume of 3,254,777 shares changing hands.

A number of other research analysts have also issued reports on UPST. The Goldman Sachs Group boosted their target price on Upstart from $32.00 to $39.00 and gave the company a "neutral" rating in a report on Thursday, July 9th. Wall Street Zen downgraded Upstart from a "hold" rating to a "sell" rating in a report on Saturday, June 27th. Zacks Research upgraded shares of Upstart from a "strong sell" rating to a "hold" rating in a research report on Monday, April 13th. B. Riley Financial dropped their price objective on shares of Upstart from $66.00 to $54.00 and set a "buy" rating on the stock in a research note on Wednesday, May 6th. Finally, Morgan Stanley set a $35.00 price objective on shares of Upstart in a research report on Thursday, May 7th. Eight equities research analysts have rated the stock with a Buy rating, seven have assigned a Hold rating and two have given a Sell rating to the stock. Based on data from MarketBeat, the company has an average rating of "Hold" and an average target price of $44.40.

Insider Buying and Selling

In related news, Director Dave Girouard bought 170,240 shares of the firm's stock in a transaction on Thursday, May 7th. The shares were bought at an average cost of $29.37 per share, for a total transaction of $4,999,948.80. Following the transaction, the director owned 8,512,941 shares of the company's stock, valued at approximately $250,025,077.17. This trade represents a 2.04% increase in their ownership of the stock. The purchase was disclosed in a legal filing with the SEC, which is available through this link. Also, insider Sanjay Datta sold 15,000 shares of the business's stock in a transaction on Tuesday, June 9th. The stock was sold at an average price of $30.41, for a total transaction of $456,150.00. Following the sale, the insider owned 313,556 shares in the company, valued at $9,535,237.96. The trade was a 4.57% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders have sold 33,346 shares of company stock valued at $991,672 in the last quarter. Corporate insiders own 17.29% of the company's stock.

Upstart News Summary

Here are the key news stories impacting Upstart this week:

• Positive Sentiment: Upstart reported approximately $365 million in second-quarter revenue, up 42% year over year and above the roughly $352 million consensus estimate. The company also delivered 50% year-over-year growth in loan originations and record contribution profit. Upstart Q2 Earnings and Revenues Surpass Estimates
• Positive Sentiment: Management reaffirmed full-year 2026 revenue guidance of approximately $1.4 billion and emphasized stronger funding momentum, including more than $4 billion in newly committed capital. These developments could support originations and reduce concerns about Upstart’s access to lending capital. Upstart Q2 Earnings Call Highlights
• Positive Sentiment: Analysts raised their expectations following the results. Piper Sandler increased its price target from $46 to $51 and initiated an “overweight” rating, while Needham raised its target from $40 to $42 and assigned a “buy” rating. BTIG reaffirmed “buy” with a $43 target. At approximately $34.38, these targets imply potential upside of about 22% to 48%. Analyst Rating and Price Target Updates
• Positive Sentiment: Investors are also responding to Upstart’s upgraded AI lending model and the company’s conditional regulatory approval to establish Upstart Bank, which management says could simplify its operating and regulatory structure.
• Neutral Sentiment: The earnings coverage contains inconsistent EPS figures: some reports cite adjusted earnings of $0.59 per share versus a $0.58 estimate, while another summary cites $0.16 versus a $0.19 estimate. Investors may focus more closely on the company’s reconciliation of these measures and the quality of its profitability. Upstart Q2 Earnings Call Transcript
• Negative Sentiment: Macro and credit-market headwinds remain risks, and insider activity has been weighted toward selling, with 18 insider sales versus three purchases during the past six months. Institutional positioning was also mixed, with several large holders reducing stakes.

Institutional Investors Weigh In On Upstart

A number of institutional investors and hedge funds have recently modified their holdings of the company. Bayforest Capital Ltd acquired a new position in Upstart during the fourth quarter worth $25,000. Quarry LP increased its position in shares of Upstart by 749.2% in the third quarter. Quarry LP now owns 501 shares of the company's stock valued at $25,000 after buying an additional 442 shares in the last quarter. Northwestern Mutual Wealth Management Co. raised its stake in shares of Upstart by 132.2% during the 3rd quarter. Northwestern Mutual Wealth Management Co. now owns 771 shares of the company's stock worth $39,000 after buying an additional 439 shares during the last quarter. Empowered Funds LLC acquired a new position in shares of Upstart during the 4th quarter worth $40,000. Finally, Bogart Wealth LLC acquired a new stake in Upstart in the 4th quarter valued at about $44,000. Institutional investors and hedge funds own 63.01% of the company's stock.

Upstart Trading Up 5.6%

The stock has a market capitalization of $3.06 billion, a price-to-earnings ratio of 84.26, a PEG ratio of 0.78 and a beta of 2.29. The stock's 50 day moving average is $31.31 and its 200 day moving average is $31.58.

Upstart (NASDAQ:UPST - Get Free Report) last released its quarterly earnings results on Tuesday, August 4th. The company reported $0.16 EPS for the quarter, missing the consensus estimate of $0.19 by ($0.03). The business had revenue of $364.71 million during the quarter, compared to analyst estimates of $352.29 million. Upstart had a net margin of 4.34% and a return on equity of 5.63%. The firm's revenue for the quarter was up 41.9% compared to the same quarter last year. During the same quarter in the prior year, the company earned $0.36 earnings per share. On average, sell-side analysts anticipate that Upstart Holdings, Inc. will post 0.92 EPS for the current year.

About Upstart

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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