Upstart Stock Breaks Out After Earnings

Options traders are targeting UPST at five times the intraday average volume

Deputy Editor
Feb 15, 2023 at 11:03 AM
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In a staggering rebound from this morning's premarket losses, the shares of Upstart Holdings Inc (NASDAQ:UPST) are up 22.2% at $20.59 at last glance. The stock is on track for its biggest single-session gain since Nov. 10, after the cloud-based artificial intelligence lending company reported narrower-than-expected fourth-quarter losses per share. Alongside a revenue beat, these results are overshadowing a disappointing first-quarter forecast. 

UPST has spent the last six months consolidating in a tight range, first between the $15-$30 level, and more recently between $15 and $25. Year-to-date, the equity is up 51.9%, though resistance is emerging at UPST's 160-day moving average.

Jefferies slashed its price target to $15.50 from $20 after the earnings event. As a whole, analysts are overwhelmingly bearish toward UPST. Of the 14 analysts in coverage, 13 carry a "hold" or worse rating, plus, the 12-month consensus price target of $14.04 is a large discount to current levels. 

Options traders, meanwhile, have been much more optimistic than usual. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), 2.70 calls have been picked up for every put in the last 10 weeks. This ratio ranks higher than 94% of readings from the past year. 

So far today, 81,000 calls and 72,000 puts have been exchanged, which is five times the intraday average amount. The February 20 call is the most active bar far, with new positions opening at the February 18 put. 


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