Shares of Upstart are trading more than 10% lower after JP Morgan analyst Reginald Smith downgraded the rating of this stock from neutral to overweight. This fall comes after a strong rally that started since early November due to the elections, causing a rise in the stock price from $50 to $80.
Upstart is known for integrating AI in its financial technology company, offering advice on lending and credit decisions. Clients in financial industries use the platform to automate loans for their consumers: using set metrics to determine the customer’s trustworthiness outside of conventional methods. This allows borrowers to access credit when they would’ve not been able to original due to conventional schemes, such as credit ratings.
Reginald Smith accounted the downgrade to a challenging economic landscape and difficult funding schemes for the company next year. However, I believe that the stock will perform well as we move into 2025. The 20-day moving average provides a support level for the current stock price, but further selling could push the stock to $60. This price range provides a good entry point for long term investors, with a bullish $100 target for the stock.
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