The single-best performing stock on Thursday was a mid-cap credit service provider that few people have heard about. Upstart Holdings (NASDAQ: UPST), a company that offers loans and credit services to a variety of industries, saw its stock skyrocket almost 90% on Thursday after the company announced its fourth-quarter earnings results. Besides that, Upstart also announced it was making a major acquisition into the auto lending sector as well. That, in turn, led to a major analyst upgrade, which further helped to send shares soaring.
Starting off with its fourth-quarter results, Upstart reported revenues of $86.7 million for the quarter, a 38.6% increase from last year. In comparison, that’s $13.2 million higher than what Wall Street was expecting. At the same time, earnings-per-share (EPS) is up to $0.07, more than $0.05 higher than analyst expectations. Most companies that have reported their Q4 results this quarter have surpassed expectations, so Upstart Holdings is following along with the overall trend here.
Upstart added that its guidance for 2021 was looking exceptionally strong. Revenues for Q4 2021 are estimated to come in at around $115 million, while full-year revenue should be close to $500 million. If that happens, that will represent a 115% growth rate in just a year.
Besides that, the company announced that it would be acquiring Prodigy Software, an automotive retail software company. It’s part of a larger plan for the company to move into the auto loan industry, an area where Upstart has relatively little exposure to.
“While Amazon and Shopify have modernized the online shopping experience, the auto industry has been left behind. Upstart is on a path to reduce the cost of auto financing, and we can accelerate this opportunity with a modern multi-channel purchase experience,” said Dave Girouard, CEO of Upstart. “Auto retail is among the largest buy-now-pay-later opportunities, and together with Prodigy, we aim to help dealers create a seamless and inclusive experience worthy of 2021.”
Overall, all this news was very well received by shareholders. Additionally, Wall Street analysts ended up upgrading the stock in light of these announcements. Bank of America analyst Nat Schindler bumped up Upstart from a neutral “hold” to a “buy” on Thursday while more than doubling his target share price from $57 to $135. It’s a major upgrade, as analysts generally don’t revise their price targets to be multiple times higher than before.
Shares of Upstart Holdings were up around 89.3% on Thursday following the news. While the company has an $8.3 billion market cap, Upstart has remained a relatively obscure company for the most part. Up until this point, shares haven’t any big jumps or spikes in well over a year, at least, up until today. Prior to this analyst upgrade, only two analysts had a “buy” rating on Upstart, while three had a neutral “hold” rating.
Upstart Holdings Company Profile
Upstart Holdings Inc provides credit services. The company provides a proprietary, cloud-based, artificial intelligence lending platform. The platform aggregates consumer demand for loans and connects it to the network of Upstart AI-enabled bank partners. The revenue of the company is primarily comprised of fees paid by banks. – Warrior Trading News
