Upstart (NASDAQ:UPST) Posts Quarterly Earnings Results, Misses Expectations By $0.02 EPS

Upstart (NASDAQ:UPST) released its quarterly earnings data on Tuesday. The company reported $0.16 earnings per share for the quarter, missing analysts’ consensus estimates of $0.18 by ($0.02), FiscalAI reports. Upstart had a return on equity of 7.22% and a net margin of 4.84%.The business had revenue of $364.71 million during the quarter, compared to analysts’ expectations of $354.74 million. During the same period last year, the company earned $0.36 earnings per share. The firm’s 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

UPST stock traded down $0.47 during trading on Thursday, reaching $29.73. The company had a trading volume of 3,249,162 shares, compared to its average volume of 4,806,433. The company has a market cap of $2.85 billion, a price-to-earnings ratio of 60.71, a price-to-earnings-growth ratio of 0.81 and a beta of 2.29. Upstart has a twelve month low of $23.97 and a twelve month high of $76.95. The firm has a 50-day simple moving average of $31.30 and a 200-day simple moving average of $31.45.

Key Headlines Impacting Upstart

Here are the key news stories impacting Upstart this week:

• Positive Sentiment: Upstart reported second-quarter revenue of approximately $365 million, up 42% year over year and ahead of Wall Street expectations. Loan originations increased 50%, while the company achieved record contribution profit and returned to profitability on an adjusted basis. Upstart Loan Originations Jump 50% as It Preps Bank Launch
• Positive Sentiment: Management is preparing to launch Upstart Bank after receiving conditional approval from the Office of the Comptroller of the Currency. The initiative, along with more than $4 billion in newly committed capital and additional funding agreements, could improve the platform’s funding flexibility and long-term economics. Upstart Rallies Ahead of Earnings as Investors Focus on Funding Momentum
• Positive Sentiment: Needham raised its price target to $42, Piper Sandler increased its target to $51, and BTIG reaffirmed a Buy rating with a $43 target. These targets imply substantial potential upside from recent trading levels. Analyst price-target updates
• Neutral Sentiment: Unusually heavy call-option activity suggests some traders remain bullish, but options positioning can also increase volatility rather than provide a durable fundamental signal.
• Negative Sentiment: Traditional valuation measures remain demanding despite an 82% five-year share-price decline. Upstart’s reported GAAP EPS of $0.16 missed the $0.18 consensus estimate, and quarterly EPS was below the prior year’s $0.36, tempering the revenue and origination momentum. Upstart Stock Still Looks Pricey Following Its Five Year Slump
• Negative Sentiment: Recent insider activity has been dominated by sales, with 18 reported sales versus three purchases over the past six months. This may reinforce investor concerns about valuation and sustainability of the rebound.

Wall Street Analysts Forecast Growth

Several analysts have issued reports on UPST shares. Truist Financial set a $40.00 target price on Upstart in a research report on Wednesday, May 6th. Wall Street Zen cut Upstart from a “hold” rating to a “sell” rating in a research note on Saturday, June 27th. The Goldman Sachs Group lifted their target price on Upstart from $32.00 to $39.00 and gave the company a “neutral” rating in a research note on Thursday, July 9th. B. Riley Financial reduced their target price on shares of Upstart from $66.00 to $54.00 and set a “buy” rating for the company in a report on Wednesday, May 6th. Finally, Mizuho set a $45.00 price objective on shares of Upstart in a research report on Friday, May 8th. Eight analysts have rated the stock with a Buy rating, six have assigned a Hold rating and two have assigned a Sell rating to the company. According to data from MarketBeat.com, Upstart has a consensus rating of “Hold” and an average price target of $44.40.

Insider Transactions at Upstart

In related news, CFO Andrea Blankmeyer sold 7,044 shares of the company’s stock in a transaction that occurred on Friday, May 15th. The stock was sold at an average price of $29.63, for a total value of $208,713.72. Following the sale, the chief financial officer owned 162,383 shares in the company, valued at $4,811,408.29. This represents a 4.16% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CEO Paul Gu purchased 50,000 shares of the business’s stock in a transaction that occurred on Wednesday, May 13th. The stock was acquired at an average price of $27.50 per share, for a total transaction of $1,375,000.00. Following the acquisition, the chief executive officer owned 70,000 shares in the company, valued at $1,925,000. This trade represents a 250.00% increase in their position. The disclosure for this purchase is available in the SEC filing. In the last quarter, insiders sold 33,346 shares of company stock worth $991,672. 17.29% of the stock is owned by insiders.

Hedge Funds Weigh In On Upstart

A number of institutional investors have recently modified their holdings of the stock. Morgan Stanley grew its holdings in Upstart by 154.6% during the fourth quarter. Morgan Stanley now owns 4,206,615 shares of the company’s stock worth $183,955,000 after acquiring an additional 2,554,591 shares during the period. Voloridge Investment Management LLC boosted its position in Upstart by 79.8% in the 3rd quarter. Voloridge Investment Management LLC now owns 970,306 shares of the company’s stock worth $49,292,000 after purchasing an additional 430,535 shares in the last quarter. Jump Financial LLC grew its stake in shares of Upstart by 97.0% during the 3rd quarter. Jump Financial LLC now owns 470,791 shares of the company’s stock worth $23,916,000 after purchasing an additional 231,819 shares during the period. First Trust Advisors LP increased its holdings in shares of Upstart by 34.3% during the 4th 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 in the last quarter. Finally, Dimensional Fund Advisors LP increased its holdings in shares of Upstart by 382.3% during the 4th 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. Hedge funds and other institutional investors own 63.01% of the company’s stock.

About Upstart

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.