Upstart (NASDAQ: UPST) stock has fallen more than 10% after the business issued a weak Q3 sales forecast. Upstart reported sales of $228.2 million, which fell short of the $249.3 million average estimate.
Analysts’ consensus estimate of $0.08 for adjusted earnings per share was drastically undershot by $0.01. The adjusted Ebitda, which was $5.51 million, was down 91% yearly. Upstart expects this quarter’s sales to be $170 million, much lower than the $258.1 million forecast. Nat Schindler, a BofA analyst, reaffirmed a Neutral rating and a $34 price target for the stock.
“We are worried about UPST’s capacity to execute in an environment of increasing rates and defaults,” Schindler said in a letter to investors. While Bank of America’s James Faucette has maintained his Underweight rating, Morgan Stanley analyst James Faucette has decreased his price objective to $15. A more stable (if slower-growing) but decently profitable company, he said in a note, is the result of UPST’s move toward more reliable financing sources, which includes leveraging its balance sheet.
Upstart is a fintech company that offers a data-driven approach to lending. The company’s platform uses a variety of data points, including information about a person’s education, career trajectory, and online presence, to assess the risk associated with issuing a loan to that person. By providing a more accurate view of the risk associated with each potential borrower, Upstart aims to make obtaining a loan simpler and more affordable for everyone.
Upstart was founded in 2011. The company is based in San Francisco, California, and has received more than $163 million in funding. Upstart’s investors include Menlo Ventures, Blue Ivy Capital, New Enterprise Associates, NEA, and CapitalG.