Rainbows and Unicorns: Upstart Holdings, Inc. (NASDAQ:UPST) Analysts Just Became A Lot More Optimistic

Upstart Holdings, Inc. (NASDAQ:UPST) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year's forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects. Upstart Holdings has also found favour with investors, with the stock up a majestic 64% to US$77.48 over the past week. Could this upgrade be enough to drive the stock even higher?

Following the upgrade, the current consensus from Upstart Holdings' 13 analysts is for revenues of US$812m in 2025 which - if met - would reflect a major 34% increase on its sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 47% to US$0.97. Yet before this consensus update, the analysts had been forecasting revenues of US$734m and losses of US$1.31 per share in 2025. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.

View our latest analysis for Upstart Holdings

It will come as no surprise to learn that the analysts have increased their price target for Upstart Holdings 67% to US$51.21 on the back of these upgrades.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Upstart Holdings' past performance and to peers in the same industry. The analysts are definitely expecting Upstart Holdings' growth to accelerate, with the forecast 27% annualised growth to the end of 2025 ranking favourably alongside historical growth of 12% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 12% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Upstart Holdings is expected to grow much faster than its industry.

The Bottom Line

The highlight for us was that the consensus reduced its estimated losses next year, perhaps suggesting Upstart Holdings is moving incrementally towards profitability. They also upgraded their revenue estimates for next year, and sales are expected to grow faster than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Upstart Holdings could be worth investigating further.

Analysts are clearly in love with Upstart Holdings at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as recent substantial insider selling. You can learn more, and discover the 3 other risks we've identified, for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies backed by insiders.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.