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

Upstart (NASDAQ:UPST) issued its quarterly earnings results on Tuesday. The company reported $0.16 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.19 by ($0.03), FiscalAI reports. The company had revenue of $364.71 million for the quarter, compared to analysts’ expectations of $352.29 million. Upstart had a return on equity of 5.63% and a net margin of 4.34%.The company’s revenue for the quarter was up 41.9% on a year-over-year basis. During the same quarter in the previous year, the business earned $0.36 EPS.

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 Price Performance

Shares of UPST traded up $0.89 during midday trading on Tuesday, hitting $30.32. 7,673,876 shares of the company traded hands, compared to its average volume of 4,765,715. The stock has a 50-day moving average of $31.32 and a 200-day moving average of $31.69. Upstart has a one year low of $23.97 and a one year high of $85.31. The firm has a market cap of $2.90 billion, a P/E ratio of 79.79, a PEG ratio of 0.73 and a beta of 2.29.

Wall Street Analysts Forecast Growth

Several equities analysts have weighed in on UPST shares. BTIG Research reissued a “buy” rating and set a $43.00 price objective on shares of Upstart in a report on Tuesday, July 7th. Jefferies Financial Group reissued a “hold” rating and issued a $30.00 target price on shares of Upstart in a research report on Tuesday, June 9th. The Goldman Sachs Group upped their price target on Upstart from $32.00 to $39.00 and gave the company a “neutral” rating in a research report on Thursday, July 9th. Zacks Research raised Upstart from a “strong sell” rating to a “hold” rating in a research report on Monday, April 13th. Finally, Citigroup cut their price target on Upstart from $80.00 to $61.00 and set a “buy” rating for the company in a research note on Wednesday, July 22nd. Eight research analysts have rated the stock with a Buy rating, seven have given a Hold rating and two have given a Sell rating to the stock. According to MarketBeat, the stock has a consensus rating of “Hold” and a consensus target price of $43.93.

Insider Buying and Selling

In other news, insider Sanjay Datta sold 15,000 shares of the firm’s stock in a transaction that occurred on Tuesday, June 9th. The shares were sold at an average price of $30.41, for a total value of $456,150.00. Following the completion of the transaction, the insider directly owned 313,556 shares in the company, valued at approximately $9,535,237.96. This trade represents a 4.57% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, CEO Paul Gu acquired 50,000 shares of Upstart stock in a transaction that occurred on Wednesday, May 13th. The shares were purchased at an average cost of $27.50 per share, with a total value of $1,375,000.00. Following the purchase, the chief executive officer owned 70,000 shares of the company’s stock, valued at $1,925,000. This represents a 250.00% increase in their position. Additional details regarding this purchase are available in the official SEC disclosure. Insiders sold 33,346 shares of company stock valued at $991,672 in the last three months. Insiders own 17.29% of the company’s stock.

Institutional Inflows and Outflows

A number of hedge funds have recently made changes to their positions in UPST. Morgan Stanley raised its stake in Upstart by 154.6% in the fourth quarter. Morgan Stanley now owns 4,206,615 shares of the company’s stock valued at $183,955,000 after purchasing an additional 2,554,591 shares in the last quarter. Voloridge Investment Management LLC grew its stake 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 buying an additional 430,535 shares in the last quarter. Jump Financial LLC grew its stake in Upstart by 97.0% in the 3rd quarter. Jump Financial LLC now owns 470,791 shares of the company’s stock worth $23,916,000 after buying an additional 231,819 shares in the last quarter. Dimensional Fund Advisors LP increased its holdings in shares of Upstart by 382.3% in the 4th quarter. Dimensional Fund Advisors LP now owns 278,590 shares of the company’s stock worth $12,183,000 after buying an additional 220,829 shares during the last quarter. Finally, Schonfeld Strategic Advisors LLC raised its position in shares of Upstart by 366.9% during the 4th quarter. Schonfeld Strategic Advisors LLC now owns 220,051 shares of the company’s stock valued at $9,623,000 after buying an additional 172,925 shares in the last quarter. 63.01% of the stock is currently owned by hedge funds and other institutional investors.

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.