Goldman Sachs analyst Michael Ng downgraded Upstart to Sell from Neutral with a price target of $14, down from $40, which implies 49% downside. The recent slowdown in origination and revenue growth is evident of heightened competition and increasing funding costs for Upstart’s partners, which reduces the company’s visibility into long-term growth and share gains beyond 2023, Ng tells investors in a research note. The analyst says slowing growth and reduced confidence in Upstart’s “differentiation” in credit underwriting will likely catalyze a further de-rating of the stock’s valuation to be more in-line with its lending peers.
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