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Upstart Holdings stock soars 21% after BTIG raises Q2 revenue estimate

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Upstart Holdings (NASDAQ:UPST) stock surged 21% in Tuesday afternoon trading after a BTIG analyst said he sees a good chance that the AI-driven lending platform for banks turns in stronger-than-expected Q2 revenue next week.

The company will report Q2 results after the close of trading on Aug. 8. The average analyst estimate for Q2 revenue is $135.0M.

Based on web traffic analysis, BTIG analyst Lance Jessurun expects Upstart (UPST) revenue to exceed guidance and consensus by ~$10M. “We model our rate request assumptions based on a rebound in web traffic volume seen during 2Q, and assume a 10% conversion rate, modestly higher than the prior quarter, but far lower than historical averages,” he said in a note to clients.

Data from third-party sources indicated similar volume growth during the quarter, he said.

That puts his Q2 revenue estimate at $145M. As a result, Jessurun raised his price target on the stock to $72 from $42 and reiterated his Buy rating.

Meanwhile, in a recent note, JMP analyst David Scharf kept his rating on Upstart (UPST) at Market Perform. While industry-wide personal loan volumes are improving, “We do not believe UPST currently possesses any technology, analytics, funding, customer acquisition, or structural points of differentiation that would warrant a significant valuation premium to digital lending, marketplace, and financial processing peers,” he said.

While Upstart’s (UPST) stock has rocketed since the start of the year and it has a large percentage of short interest, S3 Partners’ Ihor Dusaniwsky doesn’t attribute the runup to a short squeeze. “We have not seen short covering in large size in the name yet,” he said in an email to Seeking Alpha. “There have been 1.7M shares bought to cover, worth $28M, over the last week.”

There’s ~38% short interest in the stock, with 26.9M shares sold short, according to recent data.

The SA Quant system has a Hold rating on Upstart (UPST), while the average SA Analyst rating is Buy and the average Wall Street rating is Sell.

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