UPST Should I Buy
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Upstart Holdings Inc (UPST) is not a strong buy at the moment for a beginner investor with a long-term focus. The stock faces significant risks, including insider selling, declining margins, and a CEO transition. While there is some positive revenue growth and analyst upgrades, the overall sentiment and technical indicators suggest caution. Holding off on investing until more stability and clarity in the company's outlook is advisable.
The technical indicators for UPST are mixed to bearish. The MACD is positive and expanding, indicating some bullish momentum, but the RSI is neutral at 36.214, and the moving averages are bearish (SMA_200 > SMA_20 > SMA_5). The stock is trading near its pivot point of 27.978, with support at 26.251 and resistance at 29.704. Overall, the technical setup does not strongly favor a buy.
Revenue growth of 35.2% in Q4
Analysts from Compass Point and Goldman Sachs upgraded the stock to Neutral from Sell, with price targets of $30 and $35 respectively.
The company's long-term revenue target of a 35% CAGR over the next three years indicates potential for growth.
Insider selling has increased by 874.85% over the last month.
Concerns over declining margins and a CEO transition have negatively impacted investor sentiment.
Pomerantz LLP is investigating potential securities fraud claims against the company.
Analysts from Citizens downgraded the stock to Underperform with a $20 price target, citing valuation concerns.
In Q4 2025, Upstart's revenue increased by 33.09% YoY to $265.22 million, but net income dropped significantly by -776.44% YoY to $18.64 million. EPS also declined by -666.67% YoY to 0.17. Gross margin improved slightly to 80.45%, up 1.03% YoY. While revenue growth is strong, profitability metrics are concerning.
Analyst sentiment is mixed. Recent upgrades from Compass Point and Goldman Sachs to Neutral from Sell reflect a more balanced risk-reward perspective. However, Citizens downgraded the stock to Underperform, citing valuation concerns. Price targets range widely from $20 to $84, indicating uncertainty about the stock's future performance.
