Benzinga | Oct 18, 2021 02:33PM EDT

BofA Double Downgrades Upstart, Raises Price Target: What You Need To Know

Upstart Holdings Inc's (NASDAQ:UPST) stock has appreciated by more than 787% year-to-date, and the company's near-term upside potential already seems priced in, according to BofA Securities.

The Upstart Holdings Analyst: Nat Schindler downgraded Upstart Holdings from Buy to Underperform and raised the price target from $200 to $300.

The Upstart Holdings Takeaways: The company's upbeat quarterly results were driven by share gains and significant margin expansion, with higher loan volumes and rising conversion and contribution rates, Schindler said in the downgrade note.

"While we see Upstart's significantly higher growth rate vs. industry and Upstart papers trading at a premium as proof of Upstart's differentiated ability to price risk, we think the current market valuation at 24X our 23E sales leaves little room for upside," the analyst wrote.

"Additionally, while we believe unlocking the Auto lending total addressable market (TAM) presents a large longer term opportunity for Upstart and that the acquisition of the Prodigy platform takes Upstart one step closer to materially expanding into the adjacent Autos TAM, we think this is a key part of the bullish thesis that remains in the early stages and needs to be substantiated with more segment disclosures," he added.

UPST Price Action: Shares of Upstart Holdings were trading down 3.4% at $376.75 Monday afternoon.