Compass Point Reiterates Sell Rating for Upstart Holdings with $20 Price Target

Compass Point maintains a Sell rating for Upstart Holdings (UPST) with a price target of $20. The company reported Q2 revenue of $257.29 million and a net profit of $5.61 million. Corporate insider sentiment is negative, with 142 insiders selling shares over the past quarter. The average price target for UPST is $70.11.

Upstart Holdings (UPST), a cloud-based AI lending platform, has been in the spotlight recently due to a combination of growth announcements and insider activity. The company reported Q2 2025 revenue of $257.29 million and a net profit of $5.61 million [2]. However, corporate insider sentiment is notably negative, with 142 insiders selling shares over the past quarter [2]. This mixed signal has led Compass Point to maintain a Sell rating for UPST with a price target of $20 [2].

Despite the negative insider sentiment, the stock has seen significant gains, with a year-to-date increase of 69.1% and a one-year gain of 247.7% [3]. This performance has been driven by strong growth projections and recent partnership announcements. Notably, Upstart Holdings has partnered with ABNB Federal Credit Union to offer personal loans and completed a substantial $600 million convertible notes offering [2]. These moves are expected to deepen the company’s presence in consumer lending and reinforce its balance sheet.

The market’s optimism is reflected in the stock’s valuation. According to Simply Wall St, Upstart Holdings is currently trading below its estimated fair value based on strong future growth projections and improving profitability, with an undervaluation of approximately 16% [2]. However, a different approach suggests that the company appears pricey compared to industry averages, indicating that optimism might be running ahead of reality [2].

While the company’s growth narrative is compelling, the significant insider selling raises concerns about potential risks. Persistent high default rates or sudden macroeconomic shocks could introduce volatility for both future revenue and profit stability [2]. Therefore, investors should closely monitor these factors and consider the potential risks before making investment decisions.

In conclusion, Upstart Holdings is facing mixed signals amidst its growth trajectory and insider activity. While the company’s recent growth announcements and partnerships have driven stock performance, the significant insider selling and valuation concerns warrant caution. Investors should carefully evaluate the company’s prospects and potential risks before making investment decisions.

References:
[1] https://finance.yahoo.com/news/spotlight-applovin-two-other-top-114015965.html
[2] https://finance.yahoo.com/news/upstart-holdings-upst-assessing-valuation-102233705.html
[3] https://247wallst.com/forecasts/2025/08/29/sofi-technologies-sofi-price-prediction-and-forecast-2025-2030/