Sanjay Datta, the Chief Financial Officer of Upstart (NASDAQ:UPST) Holdings, Inc. (NASDAQ:UPST), has sold 1,000 shares of company stock, according to a recent filing with the Securities and Exchange Commission. The transaction, which took place on July 22, 2024, involved shares sold at a price of $28.15 each, totaling $28,150.
The sale was conducted under a Rule 10b5-1 trading plan, which Datta had adopted on February 26, 2024. These plans allow company insiders to establish pre-arranged plans to buy or sell shares at a predetermined time to avoid accusations of insider trading.
Following the transaction, Datta still owns a substantial amount of Upstart stock, with 373,398 shares remaining in his possession. It should be noted that a portion of these securities are in the form of restricted stock units (RSUs), which are subject to vesting schedules and conditions.
Investors closely monitor insider transactions like these for insights into executives' perspectives on their company's stock value and prospects. While the reasons for insider sales can vary widely, ranging from personal financial planning to diversifying assets, the transactions are often seen as a signal of the insider’s belief in the company's future performance.
Upstart Holdings, Inc. specializes in finance services and is incorporated in Delaware. The company's headquarters is located in San Mateo, California.
In other recent news, Castlelake is set to bolster its position in the retail lending market with a $1.2 billion loan purchase from Upstart. This marks Castlelake's continued foray into areas traditionally dominated by banks, following a previous agreement to acquire $4 billion in loans from Upstart. The fintech firm, Upstart, serves as a bridge connecting borrowers with financial institutions, a role expected to be expanded through this partnership.
On the analyst front, BTIG has initiated coverage on Upstart with a 'Sell' rating, citing concerns about the company's competitiveness in the credit underwriting market. Meanwhile, Redburn-Atlantic upgraded Upstart from a 'Sell' to a 'Neutral' rating, acknowledging advancements in product innovation and balance sheet strength. However, Mizuho Securities reduced its price target for Upstart, maintaining the existing rating, following a decline in loan growth and increasing delinquencies.
In terms of financial results, Upstart reported Q1 2024 revenues of $138 million, net revenue of $128 million, and operating expenses of $195 million. The company anticipates Q2 2024 revenues of approximately $125 million and expects to achieve positive EBITDA by year-end. Amid these developments, Upstart introduced new loan products and an AI certification program for bank executives.
InvestingPro Insights
In light of the recent insider sale by Upstart Holdings, Inc.'s CFO, Sanjay Datta, it's valuable to consider the broader financial context of the company through current data. Upstart, known for its artificial intelligence-driven lending platform, has experienced notable stock price movements, which may offer insight into the company's performance and market sentiment.
InvestingPro data reveals that Upstart's market capitalization currently stands at $2.19 billion, reflecting the market's valuation of the company. Despite the challenges, the company's gross profit margin remains robust at 74.13% for the last twelve months as of Q1 2024. This indicates that while revenue has declined by 11.55% over the same period, Upstart has maintained a strong ability to control the cost of goods sold and generate profit from its revenues.
However, the company's stock is characterized by high volatility, as indicated by significant price swings over the past weeks and months. The 1-month and 3-month price total returns stand at 18.99% and 19.51%, respectively, showcasing a recent strong performance. In contrast, the 1-year price total return is at -48.49%, highlighting the longer-term downtrend in the stock's price.
InvestingPro Tips suggest that while Upstart's stock has taken a hit over the last week with a -10.61% return, the company's liquid assets exceed its short-term obligations, which may provide some financial stability. Additionally, analysts are cautious about the company's profitability outlook for this year, which could be a factor influencing insider sale decisions.
For readers interested in a deeper dive into Upstart's financial health and future prospects, InvestingPro offers additional tips and metrics. By using the coupon code PRONEWS24, readers can access this valuable resource with up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription. There are currently 7 more InvestingPro Tips available for Upstart at https://www.investing.com/pro/UPST, offering more detailed insights into the company's performance and stock behavior.
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