Upstart Holdings Inc (NASDAQ:UPST) shares are trading lower by 11.24% to $34.49 Thursday morning. The stock is potentially falling in sympathy with peer digital lending platform Affirm Holdings Inc (NASDAQ:AFRM). Piper Sandler analyst Kevin Barker on Thursday downgraded Affirm from Neutral to Underweight and announced an $11 price target.
Affirm and Upstart are direct competitors in the peer lending market. If an analyst downgrades Affirm, it could imply that Upstart may also face similar issues or challenges.
Investors may view the downgrade as an indication of increased competition or unfavorable market conditions for the entire industry, leading to a negative impact on Upstart’s stock price.
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So What Happened?
Barker anticipates that persistent higher rates will impact operating margins for Affirm due to the need to retain more loans on the balance sheet. Additionally, he foresees tighter underwriting standards, higher pricing, and the reintroduction of student debt payments leading to a slowdown in revenue growth over the next year.
Given these challenges, the analyst believes it will be challenging for Affirm to achieve the 24% revenue growth implied by consensus estimates…Read More
According to data from Benzinga Pro, UPST has a 52-week high of $39.65 and a 52-week low of $11.93.
