Upstart Holdings (UPST) Stock Forecast & Price Target

Upstart Holdings Inc. demonstrates strong financial performance, highlighted by a forecasted EBITDA margin increase to approximately 20%, leading to an anticipated EBITDA of around $211 million. The company experienced substantial growth in loan volumes, surging by 158.2% year-over-year to a total of 371,492 loans, significantly surpassing previous estimates. Additionally, revenue from fees rose by 84.5% year-over-year to $240.8 million, driven by increased personal loan volumes and an elevated take rate, thereby reinforcing a positive outlook for the company’s future revenue generation, which is now expected to be around $1.055 billion for FY25.

Upstart Holdings Inc. faces significant challenges as loans underwritten by the company are expected to experience higher loss rates, which may negatively impact investor demand and result in adverse fair value marks on existing loans. The tightening credit market and rising interest rates are likely to hinder Upstart's ability to profitably underwrite loans at competitive rates, further pressuring growth and profitability. Additionally, despite a solid second quarter, the modest top-line guidance raise and a reduced fiscal year 2025 outlook for net interest income have contributed to a sharp decline in the stock price, reflecting investor disappointment against high initial expectations.