The technology industry has been front and center since last year as the dependence on technology accelerated because of the pandemic.
However, this pandemic-driven tech boom might finally come to an end soon because the industry is facing several headwinds, ranging from a global semiconductor shortage to reduced e-commerce sales with the resurgence of brick-and-mortar shopping. In addition, concerns surrounding rising cybercrime constitute a significant challenge.
Because investors are expected to focus on cyclical and outdoor stocks amid the accelerated economic recovery, Wall Street analysts expect the prices of tech stocks Upstart Holdings, Inc. (UPST – Get Rating) and Doximity, Inc. (DOCS – Get Rating) to slump in the coming months.
UPST is a cloud-based Artificial Intelligence (AI) platform that connects individuals, banks, and institutional investors that are striving to increase their access to credit and to reduce risk and cost. The company went public through the traditional IPO process on December 16, 2020, listing nine million shares on the Nasdaq stock exchange. UPST is headquartered in San Mateo, Calif.
On September 8, UPST announced a partnership with Water and Power Community Credit Union (WPCCU) to reach out to new customers and provide personal loans. However, this venture’s success depends on customers’ willingness and ability to borrow. Thus, it might take some time for UPST to profit from this partnership.
A few days earlier, UPST launched the Spanish language version of its personal-loans platform to accelerate inclusivity. But the Spanish version of the auto loan product is still a ways off. In its fiscal second quarter, ended June 30, UPST’s revenue increased 1,017.7% year-over-year to $193.95 million. However, its total operating expenses also increased 448.5% from the same period last year to $157.65 million. This can be attributed to a 1,296.5% year-over-year rise in sales and marketing expenses to $75.92 million.
The stock has gained 69.3% in price over the past three months and 107.6% over the past month. However, the $207.00, 12-month median price target for UPST indicates a 24.5% potential downside.
UPST’s POWR Ratings are consistent with this bleak outlook. The stock has an F Stability grade, and a D Value grade. In the 106-stock, D-rated Financial Services (Enterprise) industry, it is ranked #49. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
Click here to see additional POWR Ratings for UPST (Growth, Momentum, Sentiment, and Quality).
Click here to check out our Cloud Computing Industry Report for 2021
DOCS in San Francisco is a cloud-based digital platform that provides tools, news and research for medical professionals. The company went public with an IPO listing of its class A common stock on June 24, 2021.
On April 20, before the company…
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