Get 40% Off
💰 Buffett reveals a $6.7B stake in Chubb. Copy the full portfolio for FREE with InvestingPro’s Stock Ideas toolCopy Portfolio

Upstart Crashes 50% After Cutting Guidance, At Least 3 Firms Downgrade Stock

Published 10/05/2022, 09:10 pm
© Reuters.
UPST
-

Shares of Upstart Holdings (NASDAQ:UPST) are down nearly 50% in premarket trading Tuesday after the company slashed its FY revenue forecasts.

UPST reported Q1 revenue of $310.1 million, topping the consensus estimates of $303.3 million. The company reported a Q1 adjusted EPS of 61c, also above the analyst expectations of 53c per share.

For Q2, the AI lender expects revenue in the range of $295 million to $305 million, while analysts were looking for $337 million. Adjusted EBITDA is expected in the range of $32 million to $34 million, while adjusted net income is anticipated to range between $28 million and $30 million.

Upstart expects FY revenue of around $1.25 billion, down from its previous forecast of $1.4 billion and below the consensus projection of $1.41 billion.

“While this year is shaping up to be a challenging one for the economy, we know the drill and are confident that we can navigate whatever 2022 and beyond might hold,” CEO Dave Girouard said.

Citi analyst Peter Christiansen downgraded shares to Neutral from Buy with a $50.00 per share price target, down from $180.00.

“Our thesis going into 1Q’22 results recognized that consumer credit has been normalizing. Yet our expectation was that loan performance on recent issuance was somewhat expected, calibrated for, and perhaps performance benchmarks had been overly trend-fitted vs. less suitable trailing conditions… we had overestimated these assumptions – losing the forest through the trees,” the analyst said in a client note.

Stephens and Piper Sandler also cut their ratings on UPST stock. On the other hand, JMP analyst Andrew Boone weighed in more positively despite lowering the price target to $70.00 per share from $245.00 on rising headwinds.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

“While we acknowledge the risk around credit conditions worsening, further rate increases, and Upstart now holding more loans on its balance sheet, we believe these factors are fully incorporated into our model (we lowered 2022 revenue by 11%), and with valuation reset (shares are down 46% in after-hours trading) estimates now look conservative to us and we believe numbers can begin to move higher from here,” Boone told clients.

By Senad Karaahmetovic

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.