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Upstart Jumps as Guidance Boost Prompts Price-Target Upgrades

Analysts at Jefferies, Piper Sandler and Citi have raised their price targets on the artificial-intelligence-driven lending platform Upstart.

Shares of Upstart Holdings  (UPST) - Get Report surged Wednesday after the artificial-intelligence-driven lending platform boosted its full-year revenue guidance and received price-target upgrades from Wall Street analysts.

Shares of the San Mateo, Calif., company at last check rose 8% to $96.61. It has traded on Wednesday as high as $115.48, up 29%. The stock was the best performer among its peers, according to Bloomberg news.

For fiscal 2021 Upstart expects $600 million in revenue, 20% higher than its previous estimate of $500 million.

It also reported a second-quarter-revenue forecast that topped expectations and first-quarter results that were better than expected.

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For the fiscal second quarter Upstart expects non-GAAP earnings between $8 million and $12 million on revenue of $150 million to $160 million.

Upstart, founded by former staff at Google  (GOOGL) - Get Report, says that its lending platform is driven by artificial intelligence instead of just FICO scores. 

It is designed to reduce the risk and costs of lending for its bank partners while creating a "digital-first lending experience for customers."

And Upstart says that its "model is significantly more accurate than traditional lending models, allowing us to approve more applicants at lower loss rates."

Analysts at Jefferies, Piper Sandler and Citi raised their price targets on the stock.

Jefferies, which has a buy rating on Upstart, said it was encouraged by the raised guidance for the second quarter and for 2021.

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Jefferies said it saw long-term growth opportunities, given Upstart's first-mover advantage. The investment firm continues to believe in Upstart’s cloud-based, AI-driven lending platform.

Jefferies raised its price target to $101 from $81.

Piper Sandler, which has an overweight rating for Upstart, said it saw some upside to 2021 sales and “material upside” to 2022-2023 revenue.

Upstart has a “compelling offering” in its marketplace and it should continue to sustain high growth rates, analysts at Piper Sandler wrote in a note.

Piper Sandler raised its price target on the stock to $152 from $143.

Citi also raised its price target to $120 from $94 and affirmed a neutral rating after the company released results.

Analysts have four buy, two hold, and no sell recommendations on the stock, Bloomberg reports.