Shares of Upstart Holdings (NASDAQ:UPST) took a double-digit nosedive in after-hours trading after the firm’s Q3 revenue forecast, hovering around $140M, didn’t quite hit the mark when compared to analysts’ projections of $155.4M. It’s not all gloom, though. The lending platform served a pleasant earnings surprise, flaunting a Q2 adjusted EPS of $0.06. This is quite the leap, especially considering they were in the red by $0.47 the previous quarter. And, despite the decline from the previous year’s Q2 revenue of $228.2M, they managed to slightly outpace analyst expectations, recording a revenue of $135.8M for Q2.
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Dave Girouard, Upstart’s co-founder and CEO, struck a cautiously optimistic tone. On one hand, he celebrated the company’s strides in improving efficiency, leading to a record-high contribution margin and a cash flow in the green for Q2. On the other, he didn’t shy away from acknowledging the ongoing economic turbulence, especially pointing to high-interest rates affecting the demand for loans.
Turning to Wall Street, analysts have a Moderate Sell consensus rating on UPST stock based on one Buy, five Holds, and eight Sells assigned in the past three months, as indicated by the graphic above. Nevertheless, the average price target of $22.69 per share implies significant downside potential.
