UPST - Upstart stock plunges 16% on revenue and EBITDA forecast miss where's it headed?

2024-02-14 09:42:14 ET

Upstart Holdings, Inc. (NASDAQ: UPST), a prominent player in the artificial intelligence (AI) lending marketplace, faced a significant downturn in its stock price, plummeting by 16% following the release of its first-quarter revenue and earnings forecast.

The consumer lending company disclosed that it anticipates first-quarter revenue to reach approximately $125 million, falling short of analysts’ projections, which averaged $152.3 million.

Upstart projected negative earnings before interest, taxes, depreciation, and amortization (EBITDA) of $25 million, contrasting sharply with the consensus estimate of about $5 million in adjusted EBITDA.

CEO confident of performance

Upstart Holdings unveiled its financial results for the fourth quarter and fiscal year 2023, ending December 31, 2023. Despite challenges posed by the lending environment, Upstart CEO Dave Girouard expressed confidence in the company’s performance, highlighting resilience and operational efficiency improvements throughout the year.

How the markets reacted

The announcement of Upstart’s first-quarter revenue and EBITDA forecast deviation triggered a sharp decline in the company’s stock price, with shares falling by 16%. This downturn reflects investor disappointment and uncertainty surrounding Upstart’s ability to meet revenue and earnings expectations amidst evolving market dynamics.

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