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

Upstart (NASDAQ:UPST) released its earnings results on Tuesday. The company reported $0.16 earnings per share for the quarter, missing the consensus estimate of $0.19 by ($0.03), FiscalAI reports. The business had revenue of $364.71 million for the quarter, compared to analysts’ expectations of $352.29 million. Upstart had a net margin of 4.34% and a return on equity of 5.63%. The company’s revenue was up 41.9% compared to the same quarter last year. During the same period last year, the firm 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 Stock Up 3.0%

Shares of NASDAQ:UPST opened at $30.32 on Wednesday. Upstart has a 12 month low of $23.97 and a 12 month high of $85.31. The company’s 50-day moving average price is $31.31 and its two-hundred day moving average price is $31.58. The firm has a market cap of $2.90 billion, a P/E ratio of 79.79, a P/E/G ratio of 0.78 and a beta of 2.29.

Insider Transactions at Upstart

In other news, CEO Paul Gu bought 50,000 shares of the stock in a transaction dated Wednesday, May 13th. The stock was bought 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 approximately $1,925,000. This represents a 250.00% increase in their ownership of the stock. The purchase was disclosed in a filing with the SEC, which is available at the SEC website. Also, insider Sanjay Datta sold 15,000 shares of Upstart stock in a transaction dated Tuesday, June 9th. The stock was sold at an average price of $30.41, for a total value of $456,150.00. Following the completion of the sale, the insider owned 313,556 shares of the company’s stock, valued at approximately $9,535,237.96. The trade was a 4.57% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. In the last three months, insiders sold 33,346 shares of company stock worth $991,672. Corporate insiders own 17.29% of the company’s stock.

Institutional Trading of Upstart

A number of large investors have recently made changes to their positions in the company. Alpine Woods Capital Investors LLC bought a new stake in shares of Upstart in the 4th quarter valued at $752,000. Mercer Global Advisors Inc. ADV lifted its holdings in Upstart by 41.3% during the fourth quarter. Mercer Global Advisors Inc. ADV now owns 45,167 shares of the company’s stock worth $1,975,000 after acquiring an additional 13,205 shares in the last quarter. Beacon Pointe Advisors LLC acquired a new position in Upstart in the fourth quarter valued at about $380,000. Empowered Funds LLC acquired a new position in Upstart in the fourth quarter valued at about $40,000. Finally, XTX Topco Ltd increased its holdings in shares of Upstart by 191.4% in the fourth quarter. XTX Topco Ltd now owns 30,520 shares of the company’s stock worth $1,335,000 after acquiring an additional 20,046 shares in the last quarter. Institutional investors own 63.01% of the company’s stock.

More Upstart News

Here are the key news stories impacting Upstart this week:

• Positive Sentiment: Q2 revenue and originations exceeded expectations. Upstart generated approximately $365 million in revenue, up about 42% year over year and ahead of Wall Street estimates. Management also reported 50% year-over-year growth in loan originations and an all-time high in contribution profit, supporting the view that platform demand and operating leverage are improving. Upstart Q2 Earnings and Revenues Surpass Estimates
• Positive Sentiment: Profitability was a key positive. Zacks reported adjusted earnings of $0.59 per share, above the $0.58 consensus estimate and well above the $0.36 reported a year earlier. However, other earnings data cited $0.16 per share versus a $0.19 estimate, indicating that the result depends on the accounting measure used. Zacks Upstart Q2 Earnings Report
• Positive Sentiment: Funding and regulatory developments strengthened the growth outlook. Upstart has secured more than $4 billion in newly committed capital through agreements with investors including Fortress, Centerbridge, and Neuberger. Conditional OCC approval to establish Upstart Bank could also reduce operational and regulatory complexity over time. Upstart Funding Momentum Analysis
• Neutral Sentiment: Full-year revenue guidance was maintained near consensus. Upstart projected FY 2026 revenue of approximately $1.4 billion, broadly matching analyst expectations, so the outlook was supportive but did not represent a major forecast upgrade.
• Negative Sentiment: Macro and portfolio risks remain. Management is navigating economic headwinds and strategic shifts in its loan portfolio. Investor sentiment is also tempered by mixed institutional activity and substantial insider selling reported over the past six months, despite purchases by CEO Dave Girouard and co-founder Paul Gu.

Wall Street Analysts Forecast Growth

A number of equities research analysts have recently weighed in on the company. The Goldman Sachs Group raised their price target on Upstart from $32.00 to $39.00 and gave the stock a “neutral” rating in a research note on Thursday, July 9th. Citigroup dropped their price objective on shares of Upstart from $80.00 to $61.00 and set a “buy” rating on the stock in a report on Wednesday, July 22nd. Morgan Stanley set a $35.00 target price on Upstart in a research report on Thursday, May 7th. Weiss Ratings reissued a “sell (d)” rating on shares of Upstart in a report on Monday. Finally, Wall Street Zen cut shares of Upstart from a “hold” rating to a “sell” rating in a research note on Saturday, June 27th. Eight investment analysts have rated the stock with a Buy rating, seven have given a Hold rating and two have given a Sell rating to the company’s stock. According to data from MarketBeat.com, Upstart presently has an average rating of “Hold” and an average price target of $44.40.

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.