Upstart whiffs on earnings outlook, and its stock is plummeting
Upstart Holdings Inc. whiffed with its outlook for the current quarter, and shares of the lending company were plunging 20% in Tuesday’s after-hours action.
The company, which uses artificial intelligence to inform lending decisions, posted a fourth-quarter net loss of $42.4 million, or 50 cents a share, compared with $55.3 million, or 67 cents a share, in the year-earlier quarter.
On an adjusted basis, Upstart
UPST,
lost 11 cents a share, matching the consensus view based on analysts tracked by FactSet.
Upstart’s revenue dropped to $140.3 million from $146.9 million a year before, whereas the FactSet consensus was for $134.8 million.
Chief Executive Dave Girouard called out a “difficult lending environment” in Upstart’s earnings release but said the company’s “numbers will show that we’ve actually become more efficient in 2023.”
He added: “And even while becoming more efficient, we’ve laid the groundwork to become a more resilient and diversified company that can thrive through a wide range of economic conditions.”
Looking at the first quarter, Upstart is modeling about $125 million in revenue. Analysts had been projecting $152.3 million.
The company also models a loss of $25 million on the basis of earnings before interest, taxes, depreciation and amortization. The FactSet consensus was calling for roughly $5 million in adjusted Ebitda.
Upstart’s stock has doubled over a 12-month span but is off some 90% from its all-time high of $390 set in October 2021.