Although Upstart Holdings Inc. UPST stock has lost 95% from its peak share price, there is likely to be more pain in the coming quarters, according to Mizuho Securities.
The Upstart Holdings Analyst: Dan Dolev initiated coverage of Upstart Holdings with an Underperform rating and a price target of $17.
The Upstart Holdings Thesis: The company’s low-quality borrowers and rising delinquencies, due to high-interest rates and inflation, will likely continue to weigh on the supply of funds, Dolev said in the initiation note.
“Our scenario analysis suggests that if funding remains challenged, UPST may need to use warehouse / own-balance sheet lending to breakeven, which may not be well-received by investors,” the analyst wrote.
“Assuming the macroeconomic environment will worsen over the coming 12-18 months, we believe it is unlikely that funding for UPST will reopen en masse anytime soon,” he added.
UPST Price Action: Shares of Upstart Holdings declined by 0.75% to $21.10 in premarket trading on Tuesday.
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