Model 19 And HELOC Expansion Will Strengthen Underwriting And Funding

Analysts have slightly lowered their fair value estimate for Upstart Holdings from approximately $80.85 to $79.54. They cite concerns about rising delinquencies in recent loan vintages and possible risks to future transaction volume.

Analyst Commentary

Recent analyst notes on Upstart Holdings present a mixture of optimism and caution, reflecting both the company’s strengths and the challenges it faces in the current environment.

Bullish Takeaways

• Bullish analysts have lifted price targets for Upstart, citing positive quarterly results that indicate resilience in the company’s execution and underlying business model.
• Despite volatile market reactions, continued growth in transaction volume and a strong earnings beat are viewed as signs of Upstart’s ability to navigate near-term uncertainty.
• The company’s marketplace platform is regarded as a leader in the sector, with potential for share gains as lending activity stabilizes or recovers.
• Raising of price targets reflects confidence that current challenges may be temporary and that valuation upside remains achievable if execution stays on track.

Bearish Takeaways

• Bearish analysts remain cautious due to a concerning rise in loan delinquencies in recent vintages, which they see as a potential risk to sustained transaction growth and loan performance.
• Some note that consensus expectations for transaction volume may be overly optimistic, particularly if delinquency trends persist or worsen.
• There are concerns over take rate compression as Upstart shifts its focus upmarket, with risks that this could weigh on future profitability and growth rates.
• Certain Wall Street firms have tempered their outlooks and suggest near-term downside in the stock if these business risks are not addressed effectively.

What's in the News

• Cornerstone Community Financial Credit Union has partnered with Upstart to offer more inclusive personal loans via the Upstart Referral Network, with lending set to begin in April 2025 (Key Developments).
• ABNB Federal Credit Union started partnering with Upstart in May 2025, expanding access to personal loans through a streamlined and branded online experience (Key Developments).
• Cabrillo Credit Union joined the Upstart Referral Network in April 2025, allowing qualified applicants to receive tailored offers and complete loan processes online (Key Developments).
• Upstart completed its previously announced buyback program, repurchasing a total of 5,884,000 shares. This represents 7.04% of shares for $177.95 million (Key Developments).
• The company provided earnings guidance for Q3 and the full year 2025, forecasting $280 million in quarterly revenue, a GAAP net loss of $9 million for the quarter, and $1.055 billion in annual revenue with $35 million in GAAP net income (Key Developments).

Valuation Changes

• Fair Value Estimate has decreased slightly from $80.85 to $79.54, reflecting a modest reduction in assessed company value.
• Discount Rate has risen from 8.32% to 8.50%. This indicates a higher return requirement and slightly increased perceived risk.
• Revenue Growth Projection remains unchanged at approximately 27.21%, suggesting stable growth expectations.
• Net Profit Margin Projection is effectively unchanged and holds steady at around 18.52%.
• Future P/E Ratio has fallen slightly from 34.12x to 33.74x. This reflects a minor adjustment in valuation multiples by analysts.