Morgan Stanley analyst James Faucette maintained a Sell rating on Upstart Holdings (UPST – Research Report) today and set a price target of $12.00.
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James Faucette has given his Sell rating due to a combination of factors impacting Upstart Holdings. Despite positive developments such as improved credit outcomes, stable employment, and a favorable credit environment, concerns remain about the company’s long-term earnings potential and cyclicality. The company’s recent success in terms of transaction volume growth and a promising outlook for the upcoming quarters are noted, yet these are seen in light of model improvements rather than sustainable market conditions.
Additionally, Upstart’s shift to one-year vesting periods for stock-based compensation (SBC) is weighing on profitability, raising questions about the cost structure. While the environment currently appears supportive, with potential for accelerated volume growth, the reliance on macroeconomic improvements and the impact of SBC costs create uncertainty. These elements contribute to a cautious stance on the stock, warranting the Sell rating.
According to TipRanks, Faucette is a 5-star analyst with an average return of 5.7% and a 64.88% success rate. Faucette covers the Technology sector, focusing on stocks such as Endava, Fiserv, and Accenture.
In another report released yesterday, Bank of America Securities also reiterated a Sell rating on the stock with a $39.00 price target.