Upstart Holdings (UPST) Stock Forecast & Price Target

Upstart Holdings Inc reports impressive growth metrics, with loan volumes increasing by 127.5% year-over-year, driven by strong demand from near-prime borrowers and new product offerings such as automotive and home equity loans. Revenue is projected to grow by 63% year-over-year in 2025, supported by an effective cost management strategy, as operating expenses are expected to rise by only 23% in the same year. The company is also enhancing its operational efficiency, with automation exceeding 90% of loan originations and anticipated EBITDA margins improving from 20% to 30% by 2026, bolstering its long-term profitability outlook.

Upstart Holdings Inc experienced a decline in revenues and provided guidance that fell short of expectations for the fourth quarter of 2025, as its risk models adopted a conservative stance in response to macroeconomic conditions, leading to a notable drop in conversion rates. Despite reporting a 30% quarter-over-quarter increase in applications, the company's increased pricing and reduced approval rates indicate potential challenges in maintaining consumer demand and loan performance. Additionally, anticipated higher loss rates on underwritten loans could adversely affect investor confidence and funding, compounding the negative outlook on the company's financial metrics.