Shares of Upstart Holdings (NASDAQ:UPST) soared today, despite very weak guidance and an analyst downgrade. Peter Christiansen of Citibank changed his rating from Hold to Sell while assigning a price target of $11 per share. For reference, his previous price target was $17 per share.
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Christiansen is concerned about the supply for non-prime lending, and that funding supply is likely to come in at lower unit economics. He also finds the valuation difficult to justify due to the limited visibility. Yet, investors seem to be in a rush to buy shares. It’s possible that this is a short squeeze, as the percentage of shares shorted stood at almost 40% on January 31, 2023.
Overall, Wall Street analysts have a consensus price target of $15.56 on UPST stock, implying almost 24% upside potential, as indicated by the graphic above.