Upstart Holdings (UPST): Examining Valuation as Analyst Views Shift and Earnings Forecasts Change

Upstart Holdings (UPST) is facing heightened interest from investors after recent analyst sentiment and earnings revisions have sent mixed signals. While consensus points to earnings growth, there have been some near-term downward revisions.

See our latest analysis for Upstart Holdings.

Upstart’s stock price has experienced notable volatility, with a sharp 7-day share price return of 12.85% following months of downward momentum. Despite this, the company maintains a solid three-year total shareholder return of 115.14%. Recent swings indicate that investors are reassessing their confidence, weighing growth potential against new risks as market sentiment changes.

If you’re keeping an eye on stocks showing strong moves and want a fresh perspective, now is the perfect time to discover fast growing stocks with high insider ownership.

With Upstart Holdings showing robust long-term returns but trading at a premium to peers, the question remains: Is Wall Street underestimating future upside, or is all that growth already reflected in the share price?

Most Popular Narrative: 24.1% Undervalued

Upstart Holdings’ narrative fair value estimate sits well above its latest close, suggesting analysts see substantial runway for the stock price. The narrative point of view combines projected revenue growth, expanding partnerships, and profitability improvements to establish a bullish case.

Improvements in underwriting, automation, and personalization enhance loan approval rates, lower costs, and reduce default risks, positively impacting revenue and net margins.

Read the complete narrative.

Want the story behind that bold valuation? The narrative’s strength depends on aggressive forecasts of higher profits and operational breakthroughs. Curious which key drivers make analysts so bullish? Uncover the numbers and the thinking behind this projection by reading the full narrative for the inside track.

Result: Fair Value of $55.38 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistently high delinquency rates and ongoing macroeconomic volatility could challenge Upstart Holdings’ revenue stability and dampen analysts’ bullish outlook.

Find out about the key risks to this Upstart Holdings narrative.

Another View: Multiples Indicate Expensive Valuation

Looking at price-to-earnings, Upstart trades at 127x earnings, which is significantly higher than the US Consumer Finance industry average of 9.7x and the fair ratio of 44.2x. This sizable premium suggests the market is anticipating strong growth. However, if expectations are not met, shares could face a rapid correction. Is the potential upside worth the valuation risk?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Upstart Holdings Narrative

If you see the story differently or want to reach your own conclusions, the data is at your fingertips. You can craft a custom narrative in just minutes. Do it your way

A great starting point for your Upstart Holdings research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

Looking for more investment ideas?

The smartest moves start with a great screener. Unlock new opportunities and broaden your watchlist by checking out these handpicked alternatives for bold investors.

• Grow your passive income and target stable returns when you check out these 15 dividend stocks with yields > 3% with yields above 3%.
• Get ahead of the next tech revolution by reviewing these 25 AI penny stocks where AI-driven innovation is creating breakout potential.
• Capitalize on hidden bargains others miss by searching through these 927 undervalued stocks based on cash flows that appear attractively priced based on future cash flows.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com