UPST Faces Challenging Period, Potential for Recovery Amidst Bearish Sentiment

Fundamental Analysis

Trading on the NASDAQ, Upstart Holdings, Inc. (UPST) is currently valued with a Market Capitalisation of $2.77 billion. The total number of shares standing amounts to 82.67 million. Though the company demonstrated weaker performance recently, closing at $33.50, down 4.52% from the previous trading day on August 11, 2023, the stock's trend over the past year shows a high of $72.58 and a low of $11.93. This expansive fluctuation signals a high volatility and possible opportunities for investors who are well-positioned.

The company's latest earnings per share (EPS) stood at -$3.82, reflecting a challenging financial period for the firm. This factor, combined with a PE ratio of -8.77, makes the stock less appealing for investors seeking stable profitability. However, the negative EPS also indicates there's room for financial recovery.

Seeing the fifty-day moving average at $43.58 above the recent last close, it can be suggested that the stock is currently underperforming, which is indicative of the stock's current downtrend. On the other hand, the 200-day moving average of $24.03 implies that overall trend maintains a bullish outlook since the last close is significantly higher.

The recent negative news surrounding the company may impact investor sentiment. UPST recently plunged 45% due to some issues that arose, following better than expected Q2 earnings report. While the potential of AI's trillion-dollar opportunity continue to draw investors, the ongoing challenging macro environment is pressuring the progress of UPST. Specifically, Q3 guidance was reported to be weaker than expected.

Technical Analysis

The technical analysis shows signs of a bearish tone with a Relative Strength Index (RSI) of 36, which signifies that the stock is on its way towards the oversold territory. The Moving Average Convergence Divergence (MACD) 3-month at 8.49 suggests a bearish sentiment, further supported by the fact that the price is currently located below its 50-day Moving Average.

On the other hand, the stock's Average True Range (ATR) is a substantial 19.20, implicating that the stock could encounter hefty price movements. With the stock's current support level at $32.05 and resistance at $34.03, any breakout from these levels could result in significant price shifts.

Price Predicition

For the next trading day on August 14, 2023, given the current technical and fundamental insights and the weak Q3 guidance, UPST might make a slight improvement in response to the stock being oversold, but don't expect an immediate rebound to its previous highs until solid recovery signals emerge.

Looking ahead into the week, factors to consider include the bearish trend observed in its 50-day Moving Average and negative overall sentiment. However, considering the significant volatility characteristic to UPST with a large ATR and a strong support at $32.05, it's feasible that the stock might witness a recovery, although it would likely not exceed the resistance at $34.03.

Final Recommendation

Given the comprehensive analysis of UPST, it's observed that the stock is facing a challenging period, both from fundamentals (negative EPS and weak Q3 guidance) and technicals (RSI heading towards oversold and underperforming 50-day moving average). Despite the tumbling stock price, there's still considerable potential for its AI-powered lending platform within an increasingly digital finance industry. Based on the known day of earnings announcement scheduled for November 6, 2023, this stock could provide an opportunity for risk-tolerant investors given the discounted stock price.

As of now, UPST is a HOLD. Despite negative short-term performance, its long-term potential and strong standing within the AI industry makes it worth waiting for a turnaround. Both potential investors and current shareholders should keep an eye on the earnings announcement date and watch for signals of recovery.