What Happened?
Shares of aI-powered lending platform Upstart (NASDAQ: UPST) fell 3.2% in the morning session after a "Sell" rating was initiated by Goldman Sachs.
The investment bank set a price target of $71.00, which suggests a potential downside of about 10% from its previous closing price. In the analyst note, Goldman Sachs acknowledged that Upstart is a leading marketplace lender with sophisticated machine learning models that allow for better risk pricing compared to its competitors. However, the bank expressed reservations about the company's business model. Concerns were raised about the highly competitive nature of the online personal loan market and Upstart's significant reliance on third-party funding sources that can be cyclical, meaning they are sensitive to economic ups and downs. Goldman also noted the company's limited progress in fostering long-term relationships with its customers.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Upstart? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Upstart’s shares are extremely volatile and have had 81 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
Upstart is up 20.8% since the beginning of the year, but at $73.45 per share, it is still trading 17.3% below its 52-week high of $88.77 from February 2025. Investors who bought $1,000 worth of Upstart’s shares at the IPO in December 2020 would now be looking at an investment worth $2,492.
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