Upstart Holdings Inc (NASDAQ: UPST) Stock Soars 38% on Strong Q2 Earnings and Revenue Outlook
Upstart, a fintech company utilizing AI for bank loans, surpassed revenue expectations with $128 million in Q2, beating projections of $124 million. Despite a net loss of $54.5 million, the adjusted net loss of $15.3 million outperformed estimates of a 39 cents per share loss.
Although the quarterly numbers may not have been outstanding, the significant increase in Upstart stock is attributed to a promising revenue forecast for the struggling fintech.
A Long Way Down
After an IPO at $26 per share in 2020, Upstart’s stock price skyrocketed to $400 in 2021 before plummeting to $11 in March 2023, marking a 97% decline. Currently trading at around $35 per share, the stock is down 41% YTD.
Why Upstart Stock Fell
Upstart’s initial success was overshadowed by high inflation and interest rates, leading to reduced lending and revenue. The company is focusing on improving technology and cost efficiency to return to profitability.
An Improving Outlook
Following a positive Q2 release, Upstart projects revenue of $150 million for the next quarter, with CEO Dave Girouard expressing optimism for growth and improved margins. The company anticipates reaching positive adjusted EBITDA in Q4.
Is Upstart Stock a Buy?
While Upstart received price target upgrades, analysts remain cautious due to market volatility. However, it may be worth reconsidering in the future if the company achieves consistent profitability and a more favorable lending environment.
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