UPST has massive contrarian potential even amid its modest year-to-date gains
Upstart Holdings Inc (NASDAQ:UPST) stock was last seen up 5.5% at $53.34, as the broader market reacts to Donald Trump's Presidential election victory. Upstart is gearing up for its latest earnings report, due out after the close tomorrow, Nov. 7. And since the artificial intelligence (AI)-driven consumer lending name is particularly sensitive to interest-rate moves, the Fed's decision will likely have an impact on the stock that day as well.
UPST soared 39.4% after earnings last quarter, though the three post-earnings moves before that were sharply negative. This time around, the options pits are pricing in a 28.5% next-day move, slightly higher than the 24.9% swing averaged over the last two years.
On the charts, Upstart stock is climbing back toward its Oct. 15 52-week high of $57.40 after consolidating above $48 -- home to its December 2023 peak. Since the start of the year, the equity is up 29.6%.
A short squeeze could provide additional tailwinds in the event of an upbeat quarterly report. Short interest represents 31.6% of the stock's available float, and would take three days to cover, at UPST's average pace of trading. Overdue upgrades could also be in store. Despite the sizable year-to-date lead, 16 of the 17 brokerages maintain a "hold" or worse rating, while the consensus 12-month price target of $31.23 is a 41.7% discount from its current perch.
