Sign InUpstart Holdings, Inc.: Stock Analysis, Future Growth Potential, and Market Sentiment
Summary
Upstart Holdings, Inc. (UPST) is a mid-cap stock with a market capitalization of $4.28 billion and a high daily trading volume, but despite beating expectations in its second-quarter earnings, the stock's performance stalled, although there is potential for a short squeeze rally post-earnings announcement according to Goldman Sachs; overall, the stock is currently rated 'Hold' with indicators suggesting a possible market sentiment recovery and potential future growth.
Company Overview
Upstart Holdings, Inc., known by the ticker UPST, is a publicly traded company on the NASDAQ exchange. With a market capitalization of $4.28 billion, it is considered to be a mid-cap stock. However, it has a notably high volume of approximately 13.09 million shares traded daily, which is above its average volume of 12.01 million.
Recent Price Performance
As of August 8, 2023, the previous trading day, the stock closed at a price of $51.75, down by 0.42% ($0.22). It was traded within a range between $46.30 and $53.60 on the same day. In the 2023 trading year, the stock reached a peak price of $72.58 and a minimum price of $11.93.
Technical Analysis
Examining its price performance over time through technical indicators reveals some insights. The 50-day moving average price stands at $42.78, and the 200-day moving average is at $23.78, indicating a general uptrend in the stock's price. The Relative Strength Index (RSI14), which gauges price momentum, reads at 44; this is relatively neutral, leaning neither towards overbought nor oversold conditions. The Moving Average Convergence Divergence (MACD), another important momentum indicator, has a value of 10.41, signaling bullish sentiment in the stock.
Fundamental Analysis
Fundamentally, the stock's EPS stands at -$3.82, and it has a negative PE ratio of -13.55, indicating the company is not currently profitable. The stock's discounted cash flow (DCF) is at $56.85, which suggests the stock might be undervalued. Moreover, the analysts' median target price is $20.5, although it ranges from a low of $10 to a high of $180.
Recent News
News reports reveal that investors weren't impressed with the fintech's second-quarter results, even though Upstart beat on both the top and bottom lines, making the stock's performance stall. The company's earnings announcement is set for August 8, 2023, which might be further influencing investors' sentiment. Despite recent declines, Goldman Sachs still believes that the stock is potential for a short squeeze rally once earnings are announced.
Stock Prediction
Taking into account the technical indicators and the recent news, the stock could show a slight increase during the next trading day on August 9, 2023, fueled by post-earnings announcement market reactions. Its 50-day moving average also indicates an uptrend, which could continue into the upcoming week. However, whether this increase is enough to break the resistance at $58.4 remains uncertain.
Evaluation and Recommendation
Based on the analysis, UPST is currently a 'Hold'. Despite the recent downturn, technical indicators point to possible market sentiment recovery. Meanwhile, the company's fundamentals suggest that it is currently undervalued, indicating potential for future growth. However, keep in mind that the high volatility of the stock, as indicated by its ATR of 11.56, means that substantial price swings are possible. Investors should consider this when making their decision.
