UPST - Upstart Q4 Earnings: Too Much Doubt Stay Out Of The Stock
2024-02-15 08:00:00 ET
Summary
- Upstart stock is dropping like a rock in today's session after a decent Q4 showing was overshadowed by a hugely disappointing Q1 revenue and loss forecast.
- Amid an uncertain macroeconomic environment, Upstart is tightening its credit box due to deterioration in the primer borrower segment. This is hurting lending transaction dollars and profitability.
- In today's note, I share a fresh take on UPST's business, outlook, valuation, and technicals.
Introduction
Despite reporting a decent Q4, Upstart Holdings (UPST) stock has nosedived to the mid-$20s (down -20%) in today's session, as investors react to yet another appalling guide [Q1'24 revenue forecast: $125M vs. est. $150M] from Upstart's management.
After being a big Upstart proponent in the $10s and $20s, I turned neutral on UPST stock in mid-2023 and stuck to a "Hold" rating after a horrific Q3 report in my last update on the AI lending platform company:
Upstart Q4 Earnings: Too Much Doubt, Stay Out Of The StockI had planned to resume accumulation in UPST in the mid-$20s back in August 2023. While Upstart's long-term risk/reward has improved significantly at the current stock price [$22.6 per share], underwhelming business performance in Q3 2023 and poor guidance for Q4 make Upstart a show-me story for the foreseeable future.