Upstart Holdings (UPST) Stock Forecast & Price Target

Upstart Holdings Inc. demonstrates a robust growth trajectory, with loan volumes increasing 127.5% year-over-year to 428,056, primarily driven by demand from near-prime borrowers and the introduction of new products. The company's revenues are projected to grow 63% year-over-year in 2025, alongside an anticipated improvement in EBITDA margins, which are expected to rise to approximately 30% by 2026. Furthermore, the ongoing enhancements to its underwriting model and the significant automation exceeding 90% of originations are likely to bolster long-term profitability and operational efficiency.

Upstart Holdings Inc reported revenues and guidance for 4Q25 that fell short of expectations, mainly due to a conservative response in its risk models to macroeconomic developments, resulting in a substantial decline in conversion rates. The company's AI-powered underwriting model led to reduced approval rates and increased pricing, which could ultimately pressure its loan performance and lead to higher loss rates. Additionally, despite a rise in loan applications, the forecast for lower contribution margins and disappointing revenue projections for 4Q25 suggest challenges ahead, further contributing to a negative sentiment surrounding the stock.