Upstart Reports Q4 Earnings Beat Expectations
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5 days ago
0mins
Should l Buy UPST?
Source: seekingalpha
- Earnings Beat: Upstart reported a GAAP EPS of $0.17 for Q4, exceeding expectations by $0.02, which reflects the company's ongoing improvement in profitability and boosts investor confidence.
- Significant Revenue Growth: The company achieved Q4 revenue of $296.09 million, a 35.2% year-over-year increase, surpassing expectations by $7.53 million, indicating strong performance in the personal loan market and a rebound in market demand.
- Optimistic 2026 Outlook: Upstart anticipates total revenue of approximately $1.4 billion for 2026, significantly above the consensus of $1.27 billion, demonstrating confidence in future growth, particularly with fee revenue projected to reach $1.3 billion.
- Strong Adjusted EBITDA: The expected adjusted EBITDA margin of approximately 21% indicates effective strategies in cost control and profitability enhancement, further solidifying its position in the competitive fintech landscape.
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Analyst Views on UPST
Wall Street analysts forecast UPST stock price to rise
13 Analyst Rating
7 Buy
4 Hold
2 Sell
Moderate Buy
Current: 30.190
Low
20.00
Averages
56.73
High
80.00
Current: 30.190
Low
20.00
Averages
56.73
High
80.00
About UPST
Upstart Holdings, Inc. is an artificial intelligence (AI) lending marketplace. The Company’s platform includes personal loans, automotive retail and refinance loans, home equity lines of credit (HELOCs), and small dollar loans. It applies artificial intelligence models and cloud applications to the process of underwriting consumer credit. Its AI marketplace connects consumers with its lending partner. Its consumers can access Upstart-powered loans via Upstart.com, through a lender-branded product on its lending partners’ own websites, and through auto dealerships that use its Upstart Auto Retail software. Its platform enables lenders provide a product their customers want, rather than letting customers seek loans from competitors. Its cloud-based software platform incorporates technologies and software development approaches to allow for development of new features, such as cloud-native technologies, data integrity and security, and configurable multi-tenant architecture, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Upstart Holdings Stock Plummets 13% Amid Mixed Guidance
- Significant Stock Drop: Upstart Holdings (UPST) saw its stock plummet 13% in Wednesday afternoon trading as investors reacted to mixed guidance, despite Q4 earnings exceeding Wall Street estimates and 2026 revenue guidance surpassing consensus.
- Divergence in Volume and Margins: BTIG analyst Vincent Caintic highlighted that while transaction volumes exceeded expectations, EBITDA margins fell below consensus, leading to mixed market sentiment, particularly as new auto and home loan products yield only a 4% take-rate.
- Increased Reliance on Institutional Investors: Caintic explained that Upstart now requires a $100M receivables buyer to achieve the same revenue at a 4% take-rate compared to a $50M buyer at an 8% take-rate, indicating heightened reliance on institutional investor demand and increased funding risk.
- Market Rating Discrepancies: While the SA Quant system assigns a Sell rating due to poor momentum and profitability scores, the average analyst rating is Hold, and the average Wall Street rating is Buy, indicating some market confidence in Upstart's future prospects.
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- Surge in Loan Originations: The quarter saw an 86% increase in loan originations, with projected sales for 2026 expected to reach approximately $1.4 billion, a significant improvement from last year's $1.0 billion, highlighting the company's enhanced competitiveness.
- Management Change Impact: The imminent exit of co-founder and CEO Dave Girouard raises concerns among investors, as this will mark the first time the original CEO is not at the helm, potentially affecting confidence in the company's future direction.
- Guidance Policy Shift: Upstart's decision to cease quarterly guidance in favor of annual estimates may raise transparency concerns among investors, despite still being adequate, which could negatively impact short-term stock performance.
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Upstart (UPST) Q4 2025 Earnings Call Transcript
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- Significant Stock Drop: Upstart Holdings (UPST) saw its stock plummet 13% in Wednesday afternoon trading as investors reacted to mixed guidance, despite Q4 earnings exceeding Wall Street estimates and 2026 revenue guidance surpassing consensus.
- Divergence in Volume and Margins: BTIG analyst Vincent Caintic highlighted that while transaction volumes exceeded expectations, EBITDA margins fell below consensus, leading to mixed market sentiment, particularly as new auto and home loan products yield only a 4% take-rate.
- Increased Reliance on Institutional Investors: Caintic explained that Upstart now requires a $100M receivables buyer to achieve the same revenue at a 4% take-rate compared to a $50M buyer at an 8% take-rate, indicating heightened reliance on institutional investor demand and increased funding risk.
- Market Rating Discrepancies: While the SA Quant system assigns a Sell rating due to poor momentum and profitability scores, the average analyst rating is Hold, and the average Wall Street rating is Buy, indicating some market confidence in Upstart's future prospects.
See More
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- Strong Earnings: Upstart's revenue grew 35% year-over-year to $265 million in the final quarter of fiscal 2025, and the company achieved a profit of $18.6 million, indicating ongoing progress in the alternative credit scoring market.
- Surge in Loan Originations: The quarter saw an 86% increase in loan originations, with projected sales for 2026 expected to reach approximately $1.4 billion, a significant improvement from last year's $1.0 billion, highlighting the company's enhanced competitiveness.
- Management Change Impact: The imminent exit of co-founder and CEO Dave Girouard raises concerns among investors, as this will mark the first time the original CEO is not at the helm, potentially affecting confidence in the company's future direction.
- Guidance Policy Shift: Upstart's decision to cease quarterly guidance in favor of annual estimates may raise transparency concerns among investors, despite still being adequate, which could negatively impact short-term stock performance.
See More
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- Vertiv's Upbeat Guidance: Vertiv's stock jumped nearly 20% due to its optimistic guidance for 2026, with orders accelerating significantly in Q4, surpassing Wall Street expectations and indicating strong demand in the data center market.
- Unity Software's Downgrade: Unity Software's shares fell nearly 30% after issuing a first-quarter revenue outlook between $480 million and $490 million, below analysts' expectations of $492.1 million, raising concerns about its future growth prospects.
- Smurfit WestRock Order Improvement: Smurfit WestRock's stock soared over 10% after revealing improved product orders in late December, with expectations of reaching $7 billion in profits by 2030, highlighting its long-term growth potential.
See More
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- Stock Performance: UPS stock fell by 14.4% following the announcement of its Q4 results.
- Financial Outlook: The company's outlook and leadership changes contributed to the decline in share value.
See More
Upstart (UPST) Q4 2025 Earnings Call Transcript
See More
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- Mattel's Major Decline: Mattel's stock plummeted 30% due to disappointing Q3 results, with the CEO expressing skepticism about the return of toy manufacturing to the U.S., reflecting significant challenges and a loss of market confidence for the company.
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