Shares of the AI lending platform Upstart Holdings, Inc. (UPST) spiked 8.3% after receiving a Buy rating from Goldman Sachs. The stock closed at $129.90 on July 12.
The company partners with banks to provide personal loans using non-traditional variables, such as education and employment, to predict creditworthiness. (See Upstart stock charts on TipRanks)
The stock has gained 124.4% over the past six months and has increased a whopping $340.8% over the past year.
So, What Makes the Stock So Attractive?
Yesterday, Goldman Sachs analyst Mike Ng initiated coverage on Upstart with a Buy rating and assigned a price target of $147 to the stock, implying 13.2% upside potential to current levels.
According to Ng, Upstart currently only has a 4% share of the $92bn annual unsecured personal loan origination market. Going forward, he believes the company’s AI lending platform is well-positioned to gain further market share and could also succeed in other categories, including auto loans, student loans, point-of-sale loans, and mortgages. These together would allow Upstart to benefit from a multi-trillion-dollar market.
Ng believes in the long-term growth potential of the company given its positive catalysts and exposure to new markets.
The stock commands a Strong Buy consensus rating based on 4 Buys and 1 Hold. The average Upstart price target of $144 implies 10.9% upside potential to current levels.
Also, TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on Upstart, with 51% of portfolios tracked by TipRanks increasing their exposure to UPST stock over the past 30 days.
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