UPST - Shares Rally Amid Treasury Yield Decline Yet Funding Challenges Persist in Loan Market Analysts Warn | Benzinga
On Friday, Wedbush Securities hosted a Disruptive Finance Forum, which included management meetings with Upstart Holdings Inc (NASDAQ: UPST), LendingClub Corp (NYSE: LC), and Pagaya Technologies Ltd (NASDAQ: PGY).
Analysts David Chiaverini and Brian Violino observe that despite shares rising due to the recent drop in the 10-year treasury yield, challenges persist within the industry.
While funding markets, such as the ABS market, show slight improvement compared to last year, the expenses tied to funding for loan buyers continue to be high, impacting overall returns.
Additionally, while lenders have adjusted their credit criteria, the quality of older vintage loans remains subpar. Assessing the credit performance of newer loan originations under stricter underwriting standards remains uncertain at this stage.
Wedbush keeps the Underperform rating with a price target of $10 for Upstart, given that the economics of the business model and credit quality remain under ...