Upstart Holdings (NASDAQ:UPST) shares dip as much as 5% intra-day as Atlantic analyst Simon Clinch lowers his price target on the stock to $170 per share, which still implies nearly 80% upside from Wednesday's close.
In the meantime, some fintech stocks are faring worse than the broader stock market, including, LendingClub (LC-26.7%), Robinhood Markets (HOOD-1.7%), SOS (SOS-4.1%), Paysafe (PSFE-1.0%) and SoFi Technologies (SOFI-3.1%). Recall that LC recently provided sluggish guidance for Q1 2022.
The price target adjustment reflects "a potentially new backdrop of hostility towards growth stock multiples," Clinch writes in a note to clients. Still, the analyst reiterates his Overweight rating on UPST given potential upside to EBITDA from its auto segment.
What was a nearly $400 per share stock in mid-October is now trading at sub $100, a more than 75% swoon in less than a year. Meanwhile, Clinch thinks UPST could possibly rebound beyond $300 per share.
YTD, the ARK Innovation exchange-traded fund (NYSEARCA:ARKK), which is seen as a proxy for growth-oriented stocks, falls 27% as speculators rotate out of riskier assets. Fintech stocks shed a large chunk of last year's gains since the start of 2022.
Atlantic's Overweight rating diverges from the Hold Quant Rating, with the best factor grade in Growth, the worst in Valuation.