UPST Should I Buy
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Upstart Holdings Inc (UPST) is not a strong buy for a beginner investor with a long-term strategy at this time. While the stock shows some potential upside in the long term, the negative catalysts, insider selling, lawsuits, and financial underperformance outweigh the positives. It is better to hold off on investing until there is more clarity on the company's financial stability and legal issues.
The MACD is above 0 and positively contracting, indicating a potential bullish trend. RSI is neutral at 56.43, and moving averages are converging, showing no strong directional bias. Key support is at $27.88, and resistance is at $35.04. The stock is currently trading pre-market at $33.29, slightly above the pivot level of $31.46.
Partnership with Centerbridge Partners for a $1.2 billion loan agreement to enhance funding capabilities.
Gross margin increased to 80.45%, up 1.03% YoY.
Class action lawsuits alleging misleading financial transparency and AI model performance issues.
Insider selling has increased by 874.85% over the last month.
Q3 2025 revenue missed guidance, and Q4 expectations were lowered.
Net income dropped by -776.44% YoY, and EPS declined by -666.67% YoY.
In Q4 2025, revenue increased by 33.09% YoY to $265.22 million. However, net income dropped significantly by -776.44% YoY to $18.64 million, and EPS fell by -666.67% YoY to $0.17. Gross margin improved slightly to 80.45%, up 1.03% YoY.
Analyst sentiment is mixed. Recent downgrades include BofA lowering the price target to $36 and maintaining a Neutral rating, and Mizuho lowering the price target to $51 but keeping an Outperform rating. BTIG upgraded the stock to Buy with a $43 price target, citing reduced funding risk and potential upside from a bank charter. However, there are concerns about valuation and macroeconomic uncertainty.
