UPST Should I Buy
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Upstart Holdings Inc (UPST) is not a good buy for a beginner investor with a long-term strategy at this moment. The stock is facing significant negative sentiment due to insider selling, legal investigations, and unstable financial performance. While there is potential upside if the company secures a national bank charter, the current risks outweigh the benefits, especially given the investor's preference for stability and long-term growth.
The technical indicators are bearish. The stock's moving averages are in a downward trend (SMA_200 > SMA_20 > SMA_5), and the RSI is neutral at 36.15. The MACD is slightly positive but contracting, indicating weak momentum. The stock is trading near its support level of 25.288, with resistance at 26.973. Pre-market price is down 1.70%, reflecting weak sentiment.
Filing for a national bank charter, which could significantly increase revenue streams if approved.
Analysts have set price targets indicating potential upside, with some upgrades to Buy ratings.
Revenue growth of 33.09% YoY in Q4 2025.
Insider selling has increased by 874.85% in the last month.
Legal investigation for potential securities fraud.
Stock has dropped 79% since March 2021, reflecting extreme volatility.
Net income and EPS have declined significantly, with net income down -776.44% YoY and EPS down -666.67% YoY.
Rising interest rates and underwriting issues have raised concerns about future profitability.
In Q4 2025, revenue increased by 33.09% YoY to $265.22M. However, net income dropped by -776.44% YoY to $18.64M, and EPS fell by -666.67% YoY to 0.17. Gross margin improved slightly to 80.45%, up 1.03% YoY, but the overall financial performance shows instability.
Analysts have mixed ratings. Recent upgrades include BTIG upgrading to Buy with a $43 price target and Compass Point upgrading to Neutral with a $30 price target. However, there have been several price target reductions, such as Mizuho lowering the target to $51 from $66 and BofA lowering it to $49 from $60. The sentiment reflects cautious optimism but highlights significant risks.
