BofA Securities has updated its outlook on Upstart (NASDAQ:UPST) Holdings Inc (NASDAQ: UPST), increasing the price target to $27 from the previous $23, while maintaining an Underperform rating on the stock.
The adjustment follows Upstart's second-quarter results, which surpassed expectations and prompted management to express a positive view of the company's future.
The financial firm cites the better-than-anticipated performance in the second quarter as a key reason for the price target revision.
Upstart's loan volume and revenue growth have shown signs of acceleration, a trend that is anticipated to persist as the macroeconomic environment improves. Additionally, the potential for lower interest rates is seen as a factor that could further support the business.
Despite the positive developments, BofA Securities holds a cautious stance on Upstart's valuation, noting that the current price is already reflective of approximately five times the projected 2025 revenues.
The analyst's commentary underscores Upstart's recent performance and management's optimistic tone, suggesting that the company may have reached its lowest point and is now on a path to recovery.
However, the cautionary note on valuation and the macro-dependent nature of the business, along with execution risks, contribute to the decision to maintain the Underperform rating.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.