Upstart (NASDAQ:UPST) Announces Quarterly Earnings Results, Beats Expectations By $0.13 EPS

Upstart (NASDAQ:UPST) posted its quarterly earnings data on Tuesday. The company reported $0.33 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.20 by $0.13, FiscalAI reports. Upstart had a return on equity of 9.73% and a net margin of 4.86%. The company had revenue of $370.52 million for the quarter, compared to analysts’ expectations of $362.68 million. During the same period in the previous year, the firm posted $0.23 EPS. Upstart’s revenue was up 33.7% compared to the same quarter last year.

Here are the key takeaways from Upstart’s conference call:

• Q3 execution was strong despite worsening macro conditions. Contribution Profit reached a record $218 million, up 48% year over year, while total originations rose 44% to $4.1 billion and fee revenue increased 41% to $364 million.
• Secured lending reached profitability ahead of schedule. Secured contribution margin improved to positive 17% from negative 35% in Q2, driven by better loan-sale terms, increased automation, and improved conversion and monetization.
• Higher borrower delinquencies, inflation, and interest rates are pressuring originations and balance-sheet income. Upstart lowered its full-year outlook to approximately $1.35 billion in revenue and $260 million in Adjusted EBITDA, versus prior guidance of $1.4 billion and $294 million, respectively.
• The company reported improving capital efficiency, with equity capital used falling to 9% of platform loans from 11.6% a year ago and loans held directly on its balance sheet declining to 4.8%. Upstart expects its bank, subject to regulatory approval, to launch in early 2027 and potentially release cash by shifting much of the existing loan book to deposit funding.
• Management remains confident in long-term growth from technology, marketing, and a broader customer ecosystem. More than 555,000 borrowers took out loans in Q3, including over 250,000 returning customers, while the company plans to refocus its secured products on growth in 2027 after establishing positive margins.

Upstart Trading Up 9.4%

Shares of NASDAQ UPST opened at $23.38 on Thursday. Upstart has a 12-month low of $20.59 and a 12-month high of $52.10. The stock has a market cap of $2.28 billion, a PE ratio of 39.63, a P/E/G ratio of 0.75 and a beta of 2.48. The company has a 50-day moving average of $24.84 and a 200 day moving average of $29.64.

Insider Buying and Selling at Upstart

In other news, insider Sanjay Datta sold 116,000 shares of the company’s stock in a transaction that occurred on Tuesday, September 8th. The stock was sold at an average price of $27.29, for a total value of $3,165,640.00. Following the completion of the sale, the insider directly owned 476,578 shares in the company, valued at $13,005,813.62. This represents a 19.58% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, CFO Andrea Blankmeyer sold 3,000 shares of the company’s stock in a transaction that occurred on Wednesday, August 19th. The shares were sold at an average price of $29.33, for a total value of $87,990.00. Following the completion of the sale, the chief financial officer owned 152,208 shares of the company’s stock, valued at $4,464,260.64. This trade represents a 1.93% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders have sold a total of 148,652 shares of company stock worth $4,133,720 in the last quarter. Insiders own 17.29% of the company’s stock.

Key Stories Impacting Upstart

Here are the key news stories impacting Upstart this week:

• Positive Sentiment: Upstart reported Q3 revenue of about $371 million, up 33.7% year over year, and diluted EPS of $0.33—both ahead of analyst estimates. Record contribution profit of $218 million and the secured-loan business turning profitable added to the positive results. Upstart Stock Jumps On Earnings Beat As Full Year Outlook Is Cut
• Neutral Sentiment: Analysts lowered several price targets after the report, including cuts from Citigroup, Morgan Stanley, Goldman Sachs, Truist and B. Riley. Ratings were mixed, with some firms maintaining Buy recommendations and others taking a more cautious stance. Citigroup price-target update
• Negative Sentiment: Upstart cut its full-year 2026 revenue and adjusted EBITDA guidance, citing weaker consumer credit quality, higher funding costs and a higher Upstart Macro Index reading, which points to elevated default risk. This tempered the earnings beat and record contribution profit. UPST Q3 Earnings Call Highlights Macro Risks and Revised Outlook

Analyst Ratings Changes

Several research firms have recently weighed in on UPST. Mizuho set a $35.00 target price on Upstart in a research report on Wednesday. Weiss Ratings lowered Upstart from a “hold (c-)” rating to a “sell (d+)” rating in a research note on Monday, September 28th. B. Riley Financial reiterated a “buy” rating and set a $42.00 price target (down from $54.00) on shares of Upstart in a research report on Wednesday. Needham & Company LLC reduced their price objective on Upstart from $42.00 to $30.00 and set a “buy” rating for the company in a research note on Tuesday. Finally, Loop Capital initiated coverage on Upstart in a research note on Tuesday, September 8th. They issued a “hold” rating and a $34.00 price objective for the company. Seven research analysts have rated the stock with a Buy rating, eight have given a Hold rating and two have assigned a Sell rating to the company. According to MarketBeat.com, the stock currently has an average rating of “Hold” and an average target price of $32.40.

Upstart Company Profile

Upstart Holdings, Inc (NASDAQ: UPST) operates an artificial intelligence-powered lending marketplace. Its platform connects consumers seeking credit with banks and credit unions, using data-driven underwriting models designed to evaluate applicants beyond traditional credit-score-based methods.

The company provides technology for several lending categories, including personal loans, automotive retail and refinance lending, home equity lines of credit, and small-dollar lending. Upstart’s platform supports financial institutions with application processing, risk assessment, loan origination, and related automation, while offering consumers a digital borrowing experience.

Founded in 2012, Upstart is headquartered in San Mateo, California, and primarily serves the United States.