Struggling Upstart Stock Slammed by Bearish Analysts

Options bears are already zeroing in on the lending name

Digital Content Manager
Jun 29, 2022 at 10:18 AM
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Upstart Holdings Inc (NASDAQ:UPST) stock is plummeting this morning, thanks to several bearish analyst notes. Morgan Stanley downgraded the equity to "underweight" from "equal weight," noting the company's weakening underwriting performance. Meanwhile, Upstart was part of Piper Sandler's pessimistic sweep of the consumer finance space, as the economy enters a time of "tremendous uncertainty." While the equity was spared the price-target cut given to seven other sector members, Piper Sandler noted that as a newer entrant to the consumer lending market, the company is under pressure. 

At last check, UPST was down 9% at $32.62, heading back toward its two-year low of $25.43, touched on May 11.The stock's recent rally attempt was abruptly cut short by UPST's 20-day moving average late last week, and now the shares are eyeing their fourth-consecutive monthly loss. Year-to-date, Upstart stock has lost a whopping 76% of its value. 

Analyst sentiment surrounding UPST is already lukewarm, but there's still room for additional downgrades and/or price-target cuts. Heading into today, two of the 12 covering analysts said "strong buy," eight said "hold," and two said "strong sell." Meanwhile, the 12-month consensus price target of $44.62 is a 36.7% premium to current levels. 

Upstart's options pits are already swarming with bearish activity. So far, 11,000 puts have exchanged hands, which is three times the intraday average. The most popular is the weekly 7/1 30-strike put, where positions are being sold to open, followed by the July 25 put. 


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