Upstart (NASDAQ:UPST) Posts Quarterly Earnings Results, Misses Expectations By $0.03 EPS

Upstart (NASDAQ:UPST) announced its earnings results on Tuesday. The company reported $0.16 earnings per share for the quarter, missing analysts’ consensus estimates of $0.19 by ($0.03), FiscalAI reports. Upstart had a net margin of 4.34% and a return on equity of 5.63%. The business had revenue of $364.71 million during the quarter, compared to analyst estimates of $352.29 million. During the same quarter last year, the business posted $0.36 earnings per share. The business’s quarterly revenue was up 41.9% compared to the same quarter last year.

Here are the key takeaways from Upstart’s conference call:

• Core personal loan originations rose 27% sequentially, helping drive total originations up 23% to $4.2 billion. Unsecured contribution margin increased six percentage points to 62% as mix shifted toward higher-margin personal loans and customer acquisition efficiency improved.
• Secured products made substantial profitability progress, with contribution margin improving 61 percentage points sequentially to negative 35%; management expects auto and home to reach contribution-margin breakeven by Q4 2026. Auto originations rose 264% year over year and home originations increased 139%.
• Upstart returned to GAAP profitability, posting approximately $17 million of net income and $77 million of adjusted EBITDA, while reiterating full-year guidance of roughly $1.4 billion in revenue and $294 million in adjusted EBITDA. The company also secured up to $5 billion in new institutional funding capacity and received conditional OCC approval for its bank charter, targeted for launch in early 2027.
• The company said July originations showed a modest sequential slowdown, partly reflecting a higher UMI macroeconomic risk measure, which reached 1.5 at the end of Q2. Upstart also chose not to raise its full-year outlook and is sunsetting auto refinancing because its growth potential and velocity lagged other businesses.

Upstart Stock Performance

NASDAQ:UPST traded up $0.89 on Tuesday, hitting $30.32. 7,673,876 shares of the stock were exchanged, compared to its average volume of 4,765,715. Upstart has a 52 week low of $23.97 and a 52 week high of $85.31. The stock has a market capitalization of $2.90 billion, a price-to-earnings ratio of 79.79, a P/E/G ratio of 0.73 and a beta of 2.29. The company’s 50-day moving average price is $31.32 and its 200 day moving average price is $31.69.

Insider Activity at Upstart

In other news, insider Sanjay Datta sold 15,000 shares of Upstart stock in a transaction that occurred on Tuesday, June 9th. The shares were sold at an average price of $30.41, for a total transaction of $456,150.00. Following the completion of the sale, the insider owned 313,556 shares in the company, valued at $9,535,237.96. The trade was a 4.57% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available through this link. Also, CFO Andrea Blankmeyer sold 7,044 shares of the company’s stock in a transaction on Friday, May 15th. The shares were sold at an average price of $29.63, for a total transaction of $208,713.72. Following the sale, the chief financial officer owned 162,383 shares of the company’s stock, valued at $4,811,408.29. The trade was a 4.16% decrease in their position. The disclosure for this sale is available in the SEC filing. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders have sold 33,346 shares of company stock worth $991,672 over the last 90 days. Insiders own 17.29% of the company’s stock.

Hedge Funds Weigh In On Upstart

Hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. Morgan Stanley increased its stake in shares of Upstart by 154.6% in the 4th quarter. Morgan Stanley now owns 4,206,615 shares of the company’s stock valued at $183,955,000 after acquiring an additional 2,554,591 shares during the last quarter. Voloridge Investment Management LLC boosted its stake in Upstart by 79.8% during the 3rd quarter. Voloridge Investment Management LLC now owns 970,306 shares of the company’s stock worth $49,292,000 after acquiring an additional 430,535 shares during the last quarter. Jump Financial LLC grew its holdings in Upstart by 97.0% during the third quarter. Jump Financial LLC now owns 470,791 shares of the company’s stock valued at $23,916,000 after purchasing an additional 231,819 shares during the period. First Trust Advisors LP grew its holdings in Upstart by 34.3% during the fourth quarter. First Trust Advisors LP now owns 318,547 shares of the company’s stock valued at $13,930,000 after purchasing an additional 81,416 shares during the period. Finally, Dimensional Fund Advisors LP increased its stake in Upstart by 382.3% in the fourth quarter. Dimensional Fund Advisors LP now owns 278,590 shares of the company’s stock valued at $12,183,000 after purchasing an additional 220,829 shares in the last quarter. Institutional investors own 63.01% of the company’s stock.

Analysts Set New Price Targets

A number of equities research analysts have commented on the stock. Zacks Research raised shares of Upstart from a “strong sell” rating to a “hold” rating in a report on Monday, April 13th. Piper Sandler reduced their target price on shares of Upstart from $56.00 to $46.00 and set an “overweight” rating on the stock in a research report on Wednesday, May 6th. Truist Financial set a $40.00 price target on shares of Upstart in a research note on Wednesday, May 6th. Jefferies Financial Group reissued a “hold” rating and issued a $30.00 price target on shares of Upstart in a report on Tuesday, June 9th. Finally, BTIG Research restated a “buy” rating and issued a $43.00 price objective on shares of Upstart in a research report on Tuesday, July 7th. Eight research analysts have rated the stock with a Buy rating, seven have issued a Hold rating and two have assigned a Sell rating to the company’s stock. According to data from MarketBeat, Upstart presently has an average rating of “Hold” and a consensus price target of $43.93.

Upstart Company Profile

Upstart Holdings, Inc operates a cloud-based lending marketplace that leverages artificial intelligence and machine learning to assess borrower creditworthiness. The company partners with banks and credit unions, providing its proprietary AI models and underwriting platform to facilitate consumer credit products. By focusing on non‐traditional data points—such as education, employment history and other real‐time indicators—Upstart seeks to improve approval rates and lower loss rates compared with conventional credit scoring methods.

Upstart’s core offering centers on unsecured personal loans, which borrowers can use for purposes such as debt consolidation, home improvements or major purchases.