Mizuho Securities Maintains Buy Rating for Upstart Holdings with $86 Price Target

Mizuho Securities analyst Dan Dolev maintained a Buy rating and $86 price target for Upstart Holdings. Dolev has a 4-star rating and a 52.44% success rate. Upstart Holdings has a market cap of $6.11B and a P/E ratio of -831.72. The company's corporate insider activity shows a negative sentiment with an increase in insider selling.

Upstart Holdings, Inc. (UPST) has significantly increased its private offering of convertible senior notes, raising the total amount from $500 million to $600 million. The notes, due in 2032, are priced at 0% interest and offer a conversion premium of approximately 30% over the current market price [1].

The transaction includes an option for initial purchasers to acquire an additional $90 million of notes. The net proceeds are estimated at $587.3 million, with plans to utilize these funds for debt repurchase and general corporate purposes. Upstart intends to repurchase $232.6 million of its outstanding 0.25% Convertible Senior Notes due in 2026, using around $224.4 million of the offering proceeds [1].

Mizuho Securities analyst Dan Dolev maintained a Buy rating and $86 price target for Upstart Holdings, despite the company's corporate insider activity showing negative sentiment with an increase in insider selling. Upstart has a market cap of $6.11 billion and a P/E ratio of -831.72 [2].

Upstart has also entered into capped call transactions to mitigate potential stock dilution and offset cash payments above the principal amount of converted notes. The capped call is priced at $126.92 per share, a 100% premium over the stock's last reported sale price. This strategic maneuvering aims to manage equity risks and optimize its capital structure effectively [1].

The company's latest earnings call highlighted the growth driven by AI model rollouts but also emphasized the need for profitability and funding. Upstart reported strong Q2 earnings, but the stock dropped 10.9% following the announcement, reflecting market concerns about profitability and funding [3].

References:
[1] https://www.gurufocus.com/news/3054612/upstart-announces-upsize-and-pricing-of-offering-of-600000000-of-0-convertible-senior-notes-due-2032-upst-stock-news?mobile=true
[2] https://finviz.com/quote.ashx?t=UPST