What Happened?
Shares of AI lending platform Upstart (NASDAQ:UPST) jumped 17.5% in the morning session after a Wedbush analyst upgraded the stock's rating from Underweight (Sell) to Neutral and raised the price target from $10 to $45. The analyst thinks the current price offers a balanced risk/reward. Several factors support this view, including " improving credit quality metrics, lower interest rates, and improving Upstart Macro Index which could drive a positive inflection in originations and adjusted EBITDA in the second half of 2024."
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What The Market Is Telling Us
Upstart’s shares are extremely volatile and have had 70 moves greater than 5% over the last year. But moves this big are rare even for Upstart and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 28 days ago when the stock dropped 9.8% on the news that the company announced plans to offer $300 million in Convertible Senior Notes due in 2029 to qualified institutional buyers. The stock is likely down due to concerns about the dilutive effect of the notes, which can be converted to the company's ordinary stock, raising the total share count.
Upstart is up 41.4% since the beginning of the year, and at $54.96 per share, has set a new 52-week high. Investors who bought $1,000 worth of Upstart’s shares at the IPO in December 2020 would now be looking at an investment worth $1,862.
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