Upstart Holdings Inc. (UPST) Shares Pull Back After Strong Q2 Earnings

Upstart Holdings Inc.’s stock (UPST) experienced a pullback on Monday after a significant surge in recent days. The decline follows the company’s better-than-expected second-quarter financial results, which included a narrower-than-anticipated loss and revenue exceeding estimates. Upstart’s improved conversion rate and advancements in AI technology contributed to the positive outlook. The company also provided optimistic guidance for the third quarter.

Upstart: Hold Until Rates Turn, Then Buy Aggressively

Upstart, a company that uses artificial intelligence to assess creditworthiness, has faced headwinds in the rising interest rate environment. While its revenue and conversion rates have improved recently, its balance sheet remains a concern due to its heavy reliance on debt. The timing of rate cuts remains uncertain, as does the impact of rising consumer delinquencies on Upstart’s loan performance. As a result, the analyst maintains a ‘hold’ rating on the stock, but acknowledges the potential for a ‘buy’ recommendation in the future if rates begin to fall.

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